fInancial vanguard october 1st edition by Vanguard Media Limited

OCTOBER 1, 2012

AGRA reaches 17 nations with 330 new crop varieties D

*From left: Sales Director, Scoa Nigeria Plc, Mr. Amresh Shrivastava; Programme Manager, Ogun State Agricultural Development Programme, Mr. Kunle Onasanya; Regional Business Executive - South-West, Sterling Bank Plc, Mr. Ayo Adebayo and Group Head, Agric Finance Dept, Sterling Bank Plc., Mrs. Olubukola Awosanya, during the commissioning of Sterling Tractor Financed Aquisition Scheme for Tractor Owners and Operators Association of Nigeria, held in Abeokuta, Ogun State.

173.00

-1.30

2,497.00

+15.00

20.42

+0.03

112.17

+0.16

92.07

+0.22

CURRENCY BUYING CENTRAL SELLING DOLLAR 154.78 STERLING 250.6353 EURO 200.2079 FRANC 165.3986 CFA 0.2848 WAUA 237.5652 YEN 1.9933 RENMINBI 24.6264 RIYAL 41.2725 KRONA 26.8473 SDR 238.7017

155.28 251.4449 200.8547 165.9329 0.2948 238.3327 1.9997 24.7064 41.4058 26.934 239.4728

155.78 252.2546 201.5014 1664672 0.3048 239.1001 2.0062 24.7864 41.5391 27.0207 240.2439

CBN Exchange rate as at 28/09/2012

r Kofi Annan, Co-Chairman of Alliance for a Green Revolution in Africa (AGRA) and former Secretary-General of the UN, said AGRA has reached 17 sub-Sahara African countries with 330 new crop varieties. In a keynote address at the 2012 African Green Revolution Forum (AGRF) in Arusha, Tanzania, Annan said the crop varieties were developed by AGRA since its inception. He said that more than one million small holder farmers had benefited through training on improved storage systems and post- harvest handling techniques. While thanking AGRA supporters and partners, Annan stressed the need for African nations to tackle the legacy of chronic under-funding in Continues on page 26

Proposed Nigeria oil bill taxes are fair — minister T

axes on deep offshore oil projects proposed by Nigeria are “competitive and considerate”, Nigeria oil minister said, rejecting complaints by foreign oil majors that the levies are too high. Shell Nigeria Managing Director, Mutiu Sunmonu warned last week that tax terms in a landmark Nigerian oil bill are so uncompetitive they risk rendering offshore oil and gas projects unviable, and could badly stifle investment. Exxon, the second biggest offshore operator in Nigeria, has said it could not invest in more deepwater projects if the Petroleum Industry Bill (PIB)

passes in its current form. If Nigeria is to maintain current oil reserve levels and achieve ambitions of higher production, it will be dependent on offshore development because the onshore Niger-Delta has already been extensively explored over the last 50 years. Both houses of Nigeria’s parliament have finished a first reading of a new draft of the bill meant to overhaul the oil industry in Nigeria, opening the way for lawmakers to debate the long awaited legislation. The bill, which is meant to change everything from fiscal terms to the state oil firm, has already been

delayed for five years, precisely because of these sort of disagreements between the administration, oil majors and lawmakers. Billions of dollars of investment into exploration and production are on hold until it passes. Oil Minister, Diezani Alison-Madueke said the total “government take” in the draft meaning its total share of oil revenues after all taxes and royalties - was 73 per cent, up from 61 per cent in current deals with oil majors. “The proposed increase of government take Continues on page 26 C M Y K

26 — Vanguard, MONDAY, OCTOBER 1, 2012

Cover Story

Entrepreneurial Education Revolution: An imperative for sustainable development in Nigeria: Part 3 Entrepreneurial

to equip them to manage a

E d u c a t i o n

business after graduation.

Revolution:

However, 18 percent of the

Imperative

for

programme was adequate. It

Sustainable

was inadequate because it was

respondents observed that the *Mr. Chikwe Edoziem, Executive Director, Mobil Producing Nigeria (MPN), making a presentation to Kelechi Okoroafor of Federal University of Technology Owerri during the 2012/ 2013 NNPC/EEPNL International Post-Graduate Scholarship Awards that held at Mobil Head Office, Lagos. Photo by Sylva Eleanya.

AGRA reaches 17 nations with 330 new crop varieties

Development

too theoretical, while there were inadequate facilities and

Nigeria: Part 3

no artisans for handling the

The findings of a recent study

practical.

showed that 66 percent of the undergraduates wanted to be

agriculture if they must achieve the desired goals of food and nutritional security. He added that the trend would ensure food security at home and help it continentally in the longterm, noting that the challenge was to realise a dream of a more prosperous and equitable future for all Africans. “Global food system is under extreme pressure because of ever increasing food crisis, yet, it is also the continent with abundant land resources where long-term solutions to global food and nutrition security can be found,” he said. According to him, much had been achieved in scaling up Africa’s Green Revolution by providing investments, but there is room for complacency and momentum must be maintained on action required by every partner. He further said developed countries and private sector organisations must keep promises of increased support for Africa’s agriculture with all the uncertainty and fiscal challenges it faces. The Chairman said African governments must uphold the bargain on agricultural investments to rise to at least 10 per cent levels of national budget as pledged under 2003 Maputo Declaration as well as the right policies toward public-private investments. C M Y K

He called for increased support and recognition to small holder farmers most of whom were women who constitute the majority of farming population that would encourage subsistence, employment opportunities and businesses. He added that AGRA supported climate smart transformations, capital investment in farming to address large scale land acquisition that risk giving away arable lands while strengthening the resilience of farmers to climate change. In her contribution, Melinda Gates, co-chair, AGRA and joint founder of the Bill & Melinda Gates Foundation, asked African countries to promote specific visions and to remain committed to agricultural

developments with focus on small holder farmers to ensure sufficient food and rich nutritional contents for their communities. In his address, the President of Tanzania, Jakaya Kikwete, expressed commitments to agricultural growth listing the country’s efforts in support of AGRA initiatives. Kikwete appealed to donor agencies to support Africa to realise its agricultural potential and called for increased investments in agricultural research, while ensuring that support move along with demands of small holder farmers in line with modern agricultural initiatives. The three-day programme was attended by representatives of government, donor organisations and agricultural institutions.

Proposed Nigeria oil bill taxes are fair — Minister Continued from page 25 to about 73 per cent is not only competitive but considerate when we look at the scale of other entities around the world like Norway, Indonesia and even Angola with even higher government take,” AlisonMadueke said in a statement. She added that current deepwater terms were negotiated in 1993, when oil prices were just $20

a barrel. Oil companies argue the fiscal terms on oil drilling in Nigeria should be substantially better than in other regions to compensate them for the extra risks and costs posed by piracy, kidnapping, industrial-scale oil theft and corruption. An amnesty ended political militancy in the oil-rich Niger-Delta in 2009, but massive oil theft has continued unabated.

self reliant after graduation. This

means

that

undergraduates in Nigerian universities

have

high

propensity for entrepreneurship skills. The results also showed that 32 percent of the factors that motivated the respondents to

want

into

entrepreneurship were the needs to be self reliant while 68 percent of the factors were due to the fear unemployment

Continued from page 25

There is no gainsaying the fact that entrepreneurship is the solution to unemployment and poverty among Nigerian youths and graduates.

and poverty. It was also found that 62 percent of the respondents wanted to be a sole proprietor, while 38

On eradication of poverty in

percent wanted to go into

Nigeria, 82 percent of the

partnership. In assessing the

respondents indicated that

level at which undergraduates

entrepreneurship

have been equipped with

eradicate

entrepreneurial skills and

unemployment in the country.

knowledge, 82 percent of the

There is no gainsaying the fact

respondents indicated that they

that entrepreneurship is the

had taken some courses in

solution to unemployment and

entrepreneurship in their

poverty among Nigerian

respective institutions and that

youths and graduates. The

about 78 percent observed that

Federal Government of Nigeria

the programme was adequate

has taken the bull by the horn

poverty

could and

in establishing the National

Vanguard, MONDAY, OCTOBER 1, 2012 — 27

Setting up another airline puts a question mark on PDP’s economic agenda for Nigeria privatisation and tomorrow it is nationalisation. Whatever is the fancy of the leader goes. The Obasanjo-led government that liquidated the Nigeria Airways was a PDP-led government. Some six years after the airline was liquidated, an-

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he news broken by the National President, Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), Mr Benjamin Okewu, last week that the Federal Government might float a national carrier by December, came as a surprise to those who are well informed of the fate of Nigeria Airways. Nigeria Airways was voluntarily liquidated by the PDP-led Federal Government amidst protests from both well meaning Nigerians and former staffers of the defunct airline. Okewu told newsmen in Lagos that a Federal Government committee was in place to ensure that Nigeria “has its own national carrier that would serve as a driver in the nation’s aviation industry.” The ATSSSAN president noted that the process of creating the national carrier would have been completed long ago but for the June 3rd Dana plane crash that slowed it down. “There is a committee on establishing a national carrier and incidentally, the joint trade union forum is representing the unions there.” It is funny how the PDP-led Federal Government reverses its economic policies. Today, it is

erties. South Africa Airways was facing the same problems that Nigeria Airways was facing then, but the government of South Africa injected funds into the airline and privatized it. Kenya Airline had to partner a foreign

On what infrastructure will the proposed airline operate? Nigeria Airways, its hangers, office buildings and everything were sold to private individuals for peanuts; is the government going to do a buy back of the infrastructure now that it seems desperate?

other government led by a PDP President, Goodluck Jonathan, is thinking of floating another airline with government funds. Obasanjo was advised by the International Finance Corporation, IFC, to inject funds into Nigeria Airways to get it operational and thereafter privatise it. He was also asked to allow Nigeria Airways merge with major airlines to revamp its operations. He refused both options and said; “I cannot reinforce failure.” Thereafter, he sold the airline and its prop-

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airline, KLM, for it to survive, but the Federal Government sold its airline because some powerful vested interests were eyeing the assets of the airline which they wanted as their share of the national cake. Nigeria Airways for anyone who cares to recall, was the biggest landlord in GRA; all its properties in London, US, Abidjan and Accra, were sold when it was liquidated, yet, its staff were not paid their entitlements and the matter is still in court today. Curiously, the charter that set up Nigerian Airways

was an Act of parliament. The National Assembly did not revoke the charter. The Act that set up Nigeria Airways indicated that it was set up for national prestige. That was why it was fashionable then for an aircraft that was going to London with 250 passengers on board to be diverted from Kano to take a personality to Saudi Arabia’ and all passengers would be offloaded, while it carries one person and his entourage to Saudi Arabia and stays there grounded for days. Every government official that had travelled in Nigeria Airways then travelled for free; they did not pay.

n those days, Nigerians used to feel good when at Heathrow Airport, they see an airline landing with "Green, White and Green" colours. As Nigerians, they felt good, whether the Nigeria Airways was making money or not, they felt good and had a sense of belonging because the airline was advertising Nigeria. Despite this, the government went ahead and sold the airline. Today, Nigerians are paying for it. Nigeria does not have a national carrier. The argument for wanting to set up

an airline is that foreign airlines are ripping off Nigerians. Nigeria had signed a Bilateral Air Service Agreement, BASA, with Britain and other countries. The present Minister of Aviation has seemingly discovered the lopsidedness in these agreements. BASA is an agreement that says ‘I will come to your country 10 times a week; you come to my country 10 times a week.’ Now, foreign airlines take advantage of the terms of the agreement but Nigeria does not because it sold its national carrier. But the same government officials had exploited it and traded Nigeria's terms of the agreement for cash. ‘The 10 times Nigerian carrier is supposed to come to your country and is not coming, give us the money in lieu of the10 times so that you can be coming 20 times.’ That is what Nigeria did. Besides, on what infrastructure will the proposed airline operate? Nigeria Airways, its hangers, office buildings and everything were sold to private individuals for peanuts. Is the government going to do a buy back of the infrastructure now that it seems desperate? At what price is it going to buy them back? Running in circles is not the best of economic option for a country in a hurry to catch up with others. Why was Nigeria Airways liquidated in the first instance?

BUSINESS & ECONOMY Scientist recommends sweet potato flour as alternative to wheat Rwandan Agricultural Scientist, Mr Kirimi Sindi, has advised African countries to use sweet potato flour for confectioneries as an alternative to wheat. Sindi, in a paper presented at the 16th Triennial Symposium of International Society for Tropical and Root Crops, in Abeokuta, Ogun State, noted that sweet potato is rich in Vitamin A. His paper was entitled What is the consumers’ perception of bakery products made with Vitamin A rich sweet potato and wheat? The scientist said that the consumption of sweet potato could eliminate Vitamin A deficiency common in many parts of the continent. “Sweet potato is better than wheat because it is cheaper while imported wheat is costly,” Sindi said. He explained that Africa had many local alternatives to wheat flour that could reduce

the cost of producing confectioneries. According to him, flour made from potato and cassava can be used to bake bread, doughnut, biscuits and cakes, reducing production cost by 15 per cent. Sindi said that a study, conducted by himself and four other researchers in Rwanda showed that confectioneries, made a combination of sweet potato flour and wheat, tasted better. He said that respondents in the research, preferred such confectioneries to those made from only wheat. “Manufacturers who import agricultural commodities like wheat are facing increasing costs due to rising commodity prices. Sweet potato can replace up to 40 per cent of the wheat in bakery products. This can lower production costs, save a country’s foreign exchange, and increase the

rural farmer’s income,” he noted. Using the Rwanda study as

a reference point, Sindi recommended the establishment

of more and efficient distribution and supply chains.

*From Left; Director, Brand Bulding, Unilever Nigeria Plc. David Okeme; Director, Temple School, Mrs. Shirley Okharedia; Managing Director, Unilever Nigeria Plc, Thabo Mabe; National President, Medical Women’s Association of Nigeria, Dr. Christian Campbell and the 5-year-old children of Temple School, at the Lifebuoy 2012 Global Hand-washing Day Kick-Off Campaign Tagged: ‘Help a Child Reach the Age of Five … One Nigeria Against Diarrhoea’, held in Lagos recently. C M Y K

28 — Vanguard, MONDAY, OCTOBER 1, 2012

Business & Economy adopted inflation targeting and flexible exchange rates, for example, and their fiscal and monetary policies are now more ‘countercyclical’ than in the past—that is, they stimulate the economy when it is weak, and rein it in when it is overheating.”

BRIEFS African, global leaders partner to drive agricultural growth in Africa FRICAN heads of state, ministers, private sector representatives, the international community and farmers gathered at the African Green Revolution Forum (AGRF) in Arusha to identify concrete actions for transforming Africa’s agricultural sector. AGRF 2012 is the global platform for the promotion of the significant private sector investment and policy support needed to increase agricultural productivity and income growth for the African agricultural sector. As host of the forum, H.E. Jakaya Mrisho Kikwete, President of the United Republic of Tanzania said to forum attendees on Africa’s promising future; “We are poised to succeed in our quest for eradicating hunger and poverty in Africa through transforming agriculture.” With the right policy mix, appropriate interventions being taken by African governments, the continued support of donors, and robust participation of private sector - both local and foreign-, transformation of agriculture in Africa is an achievable undertaking.”

Nasarawa State govt. commits N30m to rice production OV. Umaru Al-Makura of Nasarawa State said the government has committed N30 million to the production of rice in the state. Al-Makura stated this in Lafia when he received the Japanese Ambassador to Nigeria, Mr Ryichi Shoji, who paid him a courtesy visit. He reiterated his government’s determination to expand the scope of agricultural production in the state. “This administration has provided N7.5 million as counterpart contribution towards the education and capacity building for farmers aimed at improving agricultural production in the state.” Al-Makura said that N30 million was committed to the construction and installation of modern rice mills in the state. The governor said the project was embarked upon in collaboration with the Federal Government and the Japanese International Corporation Agency (JICA).

C M Y K

*From left: Dr Joe Odumodu, Director-General, Standard Organisation of Nigeria, representing Dr Segun Aganga, Hon Minister of Trade and Investment; Dr Obalolu Ojo, National Chairman, Nigerian Association of Industrial Pharmacists and Dr. Nelson Uwaga, chairman of the occasion at the Nigerian Association of Industrial Pharmacists' 15th annual national conference held in Lagos on Friday. Photo by Lamidi Bamidele

Emerging, developing economies now more resilient ANY emerging and developing economies did well over the past decade and through the global financial crisis. Analysis in the IMF’s latest World Economic Outlook (WEO) suggests this resilience is likely to continue. It said that optimists have pointed to improved policymaking in these economies, and to their increased “policy space” room to respond to shocks without undermining sustainability. Skeptics note that these economies’ recent good performance has been supported by factors that are prone to reversal such as strong capital inflows, rapid credit growth and high commodity prices. The IMF study suggests some of the optimism is warranted. It studied economic expansions and downturns in more than 100 emerging and developing economies over the past 60 years. The researchers found that the resilience of emerging and developing economies is not a recent development, but the result of steady gains in performance over the past two decades. These economies are now spending more time in expansion, and their downturns and recoveries have become shallower and shorter. In fact, the past decade was the first time that emerging and developing economies spent more time in expansion, and had shallower downturns, than advanced economies. This was true not just for emerging markets, but for low-income countries as well. The authors cautioned, however, that these economies are not immune to shocks, either external or domestic.

“Among external shocks, recessions in advanced economies and ‘sudden stops’ in capital inflows have the most pronounced effects,” said Jaime Guajardo, one of the chapter ’s authors. “These shocks double the likelihood that expansions in emerging and developing economies will come to an end. The effect of domestic shocks is just as strong, if not stronger— credit booms make it twice as likely that an expansion becomes a downturn by the following year, and banking crises make it three times as like-

ly.” So if shocks can easily derail expansions in emerging and developing economies, what accounts for their improved performance? Part of the improvement is because some of these shocks are less common now than in past decades, the researchers found. But the bulk of the improvement is due to better policies “Many emerging and developing economies have become better at policymaking,” said Abdul Abiad, who headed the research team. “More of them have

he researchers found that these economies have built up more room to maneuver, thanks to lower inflation and better fiscal and external positions than in the past. “Better policies and greater policy space account for three-fifths of the increased duration of in these economies’ expansions,” said Abiad, “and less frequent shocks accounts for the remainder.” But the report also cautions against complacency. “There are significant risks to the outlook for Europe and the United States,” said Guajardo. “If these risks materialize, emerging and developing economies will likely end up ‘recoupling’ with advanced economies, much as they did during the recent global crisis.” Even in the absence of external shocks, he noted, homegrown shocks could pull down growth further in some key emerging economies. To guard against such risks, the researchers say these economies will need to rebuild their buffers, to ensure that they have adequate policy space. “In response to the global downturn, policy space was appropriately used—many countries increased spending and lowered interest rates to support activity,” Abiad said.

Jigawa farmers seek food aid OME farmers in Jigawa have appealed to the Federal Government to assist them with food items to check impending shortages caused by the destruction of farm lands by flood. The News Agency of Nigeria (NAN) recalls that the Jigawa Government had declared that more than 400,000 farmlands and 360,000 houses were destroyed in 18 out of the 27 local government areas. A cross section of the farmers, who spoke to NAN in Kiyawa and Jahun local government areas, said they lost all their produce to flooding. Malam Muhammadu Nagaji, a maize farmer, said he lost four hectares of maize, millet and sorghum to the natural disaster. Nagaji said the damage caused by the flood had exposed the farmers to the danger of hunger as they had nothing left to eat. He said that he had cultivated more than 40

bags of maize and millet and could not harvest his farms due to the ravaging flood. “The farm produce were wasted by the ravaging flood. I have nothing left,” Nagaji said. Another farmer, Jamilu Isa, said that the flood had exposed them to hunger, as most families had no food to eat. Isa, who described the flood as the worst in the last 30 years, added that urgent measures were necessary to save the displaced persons from famine. “We do not have food to eat and our farms have been destroyed, ” he said, and urged the state and federal governments to assist them. Commenting on the situation, Alhaji Dahiru Madaki, the Chairman,Kiyawa Local Government Council, said that five persons were killed and thousands of hectares of farmlands were lost to flood in the area. Madaki said that the flood also destroyed houses

and cut off the 47-km KiyawaBirnin-Kudu road. He said that the council had spent N3.6 million on the provision of relief materials for distribution to the displaced persons, to cushion the effects of the flood. “The flood caused colossal damages. We are facing dangers of possible food shortage,” Madaki said. Also commenting, Alhaji Abdullahi Harbo, the Chairman of Jahun Local Government Area, said the council had procured five canoes to rescue families in about 20 villages, which were cut off by flood. Harbo said the council had also constructed embankments and distributed 30,000 bags of sand to check flooding in the area. He listed Harbo-Sabuwa, Harbo -Tsohuwa, Gemu, Kawuri, Doguwa, HayinGada, Gidan-Ganji, Gunka, Doro and Darai as some of the areas ravaged by flood.

Vanguard, MONDAY, OCTOBER 1, 2012— 29

Business & Economy

Nigeria’s foreign policy focus is to attract greater investment — Jonathan RESIDENT Goodluck Jonathan declared in New York that attracting greater foreign direct investment to accelerate domestic growth “is now the major focus of Nigeria’s foreign policy”. A statement by Dr Reuben Abati, Senior Special Assistant to the President on Media and Publicity, also quoted Jonathan as saying that the creation of more jobs for the army of unemployed Nigerians was similarly a major focus of the nation’s foreign policy thrust in the drive to grow the economy in partnership with foreign investors. The president who was speaking at a dinner organised in his honour by the Corporate Council on Africa, said that his administration was wholly committed to promoting the development of a knowledgebased economy. “The government is committed to promoting a knowledge economy that will enhance the security of lives and property, thereby accelerating growth to provide more employment and reduce youth restiveness,” he said. The President told the gathering of leading American businessmen and investors that attracting foreign investment to support the realisation of the Federal Government’s Agenda for National Transformation was now the topmost priority of Nigeria’s diplomacy abroad. “Let me restate here that Nigeria’s foreign policy is now anchored on the realisation of this Transformation Agenda through the attraction of foreign direct investment. Under the new policy thrust, our diplomatic missions abroad have been directed to focus more on attracting investment to support the domestic programmes of government with a view to achieving not only our Vision 20: 2020, but to bequeathing an enduring legacy of economic prosperity,” he said. Jonathan assured the guests that adequate safety nets had been established to protect all foreign investors in Nigeria. Such measures, he said, included the establishment and strengthening of the Infrastructure Concession and Regulatory Commission and the Bureau of Public Procurement. The President further assured the gathering that his administration was dealing decisively with Nigeria’s security challenges. “We have some security challenges now, but let me assure you that the Ni-

gerian government is on top of it. We are dealing with the issue decisively,it will soon be a thing of the past,” he said. “Opportunities abound for would-be investors with capital and technical know-how in key areas of Nigeria’s economy with high rates of return on investment, and I invite our friends in the U.S. to take advantage of existing incentives and invest more in Nigeria. I am confident that by the year 2015, Nigeria would have witnessed transformation in all sectors to the benefit of not only its citizens, but also those who have an interest in Nigeria,” President Jonathan concluded. Earlier in a welcome remark,

the U.S.Assistant Secretary of State, Amb.Johnnie Carson pledged that the Obama administration would continue to support Nigeria’s efforts to attract greater foreign investment. oting that Nigeria was already a very important destination for American companies and the second highest recipient of American direct private sector investment in Africa, Carson said that he was very optimistic that Nigeria could become a great economic success over the next decade. Carson announced that the US-Nigeria Bi-National Commission which had been established as

a primary platform for the promotion of trade and economic cooperation between the two countries would meet again in Nigeria next month. Jonathan’s other engagements in New York included meetings with President Sauli Ministo of Finland and the President of the Swiss Confederation, Mrs Eveline Widmer-Schlumpf. The President had met earlier with President Francois Hollande of France, the Emir of Qatar and President Jacob Zuma of South Africa. He also received representatives of the over 200 Nigerians who currently work for the UN and its agencies.

BRIEFS Imo is haven for investors, says Commissioner HE Imo Commissioner for Commerce and Industry, Mr Best Mbanaso, has described Imo as a haven for genuine investors. Mbanaso made the statement when he received a delegation of the Nigerian Union of Traders Association in Ghana on Thursday in Owerri. The association came from Ghana to explore investment opportunities in Imo. The commissioner assured the visitors the readiness of the state government to provide the necessary environment to ensure the success of their mission. The National VicePresident of the association, Mr Joseph Obi, told the commissioner that his members were keen on being part of the economic vision of Gov. Rochas Okorocha’s rescue mission agenda. According to Obi, Okorocha’s achievements in the state are ringing bells in Ghana.

Oil steadies above $110 per barrel RENT futures held steady above $110 per barrel on renewed worries of supply disruptions from the Middle East. The escalating euro zone debt crisis reinforced oil demand growth concerns and capped the gains. Frontmonth Brent crude rose 11 cents to 110.15 dollars a barrel, partly recouping the previous session’s losses, while U.S. oil gained 22 cents to 90.20 dollars. “There is still uncertainty over the euro zone crisis even though policymakers are putting in a lot of effort to deal with it,” said Ken Hasegawa, a commodity sales manager with Newedge in Tokyo. The geopolitical worries in the Middle East, while they have been around for a long, long time, still continue to support prices. There is about a $20 premium on Brent prices because of the tensions in the Middle East over Iran’s disputed nuclear programme, Hasegawa said. “Without that, a fair value for the contract is between $80 - $90 a barrel,” he said. Iran is under threat of military action from “uncivilized Zionists,” a clear reference to Israel, Iranian President Mahmoud Ahmadinejad said in a speech before the UN General Assembly.

B *From left: Alh. Razak Jaiyeola, Council member, Mr Doyin Owolabi, President and Mr. Sunday Bammeke, Council member, all of of the Institute of Chartered Accountants of Nigeria, during the train-the-trainers forum in Lagos.

MasterCard Foundation launches $500m scholars program HE MasterCard Foundation has announced the launch of The MasterCard Foundation Scholars Program, a $500 million education initiative that will provide talented yet economically disadvantaged students from developing countries – particularly from Africa – with comprehensive support for secondary and university education. Over the past decade, Africa has been the second-fastest growing region in the world. Seventy percent of the continent’s population is under the age of 30, and millions of them will need to enter the workforce. However, the region still lags behind in secondary and higher education completion rates. In order to sustain the continent’s rapid growth, it

will be essential that its young people have the skills needed to participate in a competitive global economy. Reeta Roy, President and CEO of The MasterCard Foundation, announced the Scholars Program at a United Nations special session marking the launch of Education First. This initiative led by SecretaryGeneral Ban Ki-moon and Special Envoy for Education, Gordon Brown seeks to ensure all children have access to quality, relevant, and inclusive education. The Scholars Program illustrates the values of the Education First initiative and was highlighted as an innovative model for educating young people and encouraging citizenship. “An education does more than liberate people from

poverty, it is the foundation of social and economic progress,” said Reeta Roy. “The MasterCard Foundation Scholars Program is a network of extraordinary educational institutions, non-governmental organisations, and young people. Together, they will contribute to the emergence of a more equitable, dynamic, and prosperous Africa.” Special Envoy Gordon Brown, the former Prime Minister of the United Kingdom, added; “The MasterCard Foundation’s significant commitment to provide today’s youth with the values, attitudes, and skills to give back and contribute to their societies through education demonstrates the values at the heart of Education First.”

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30 — Vanguard, MONDAY, OCTOBER 1, 2012

Corporate Report

Zenith Bank: Taking banking service in Nigeria to new heights ENITH Bank Plc has continued to demonstrate to the investing public that it is here to stay and ready to provide the best of service at all times. The bank has shown that it has the management capacity to weather any storm and pilot investors' money to safety and deliver superior value. In the last three years, despite the difficulties the banking industry in Nigeria has been facing, the bank has continued to excel in most performance indices. In its 22 years of operation, Zenith Bank Plc. has grown to become one of the biggest and most profitable banks in Nigeria. After going public on June 17, 2004, the bank was listed on the Nigerian Stock Exchange on October 21, 2004 following a highly successful initial public offer (IPO). The bank currently has a shareholder base of over one million and shareholder funds of N402.713 billion ($2.55bn) as at the end of second quarter of 2012 from the N394.268 billion in December 2011. This is far above the minimum required for banks of its status in Nigeria. The bank’s total assets hit N2.478 trillion in June 2012 as against the figure of N2.326 trillion it recorded in its full year result in December last year. The bank grew its total earnings from N123.192 billion as at June 2011 to N151.103 billion in June 2012. Profit before tax rose from N36.794 billion in June last year to N50.163 billion in June this year. The bank’s earning per share inched up from 101 kobo to 135 kobo in June 2012. Percentage of nonperforming loans to total loans portfolio of the bank dropped from 3.9 per cent in June 2011 to 3.3 per cent in June 2012. The bank’s operating expenses, however, rose from N59.454 billion in June 2011 to N61.898 billion in June 2012.

he operating results of the bank, since it went public in 2004, indicate an impressive performance in all its measurement parameters. Total assets grew from $1.25 billion in 2004 to $15.48 billion in second quarter of 2012, representing a growth of 1,138.4 per cent. Within the same period, total deposits went up by 1,174 per cent from $845 million to $10.77 billion, as at June 2012. The result is evidence of increasing market share for Zenith Bank C M Y K

and popular acceptance by the Nigerian banking public. Zenith Bank by its tradition places high premium on the pivotal role of exceptional service delivery in its drive to consistently exceed customer expectations. Thus, the bank has put in place a well articulated strategy to meet and surpass customer expectations and constantly ensures that plans and strategies are fine-tuned to address the changing taste and sophistication of its customers The underlying philosophy is for the bank to remain at all times, a customer-focused institution with a clear understanding of its market and environment. The bank’s commitment to customer satisfaction has at various times led to assigning critical and pervasive roles to Total Quality Management (TQM), Customer Service Ambassadors, Operation Service Excellence Teams, among others. Thus, at all times, all structures and processes are fashioned to drive consistent improvement in the

’

By OMOH GABRIEL, Business Editor

Korea; among others.

Ratings and corporate governance

•GODWIN EMEFIELE, MD/CEO

The bank’s exceptional performance is built on its experienced leadership, professionalism and vision of the management and staff

quality of service delivery. Zenith Bank laid the foundation of its structures and processes on cutting-edge Information and Communications Technology (ICT) infrastructure. This ensures that every transaction is carried out via a medium that makes for speed, flexibility, accuracy and convenience for customers. At Zenith Bank, all activities are anchored on the e-platform, ensuring service delivery through the electronic media to all customers irrespective of place, time and distance. This disposition puts Zenith Bank ahead and well prepared for the cashlite policy of the CBN which berthed in April, 2012 As the leading institution in ICT-enabled banking in Nigeria, Zenith Bank has leveraged on its deep understanding of the local business environment and global financial market to develop unique e-solutions to meet varied and specific customer needs. The bank’s range of e-products covers virtually

all services.

’

he bank’s management team is made up of seasoned professionals headed by Godwin Emefiele, the Group Managing Director and CEO, who is a pioneering staff member and has been on the board for more than a decade. He took over the reins from the founding CEO, Jim Ovia, in August 2010. The bank’s exceptional performance is built on its experienced leadership, professionalism and vision of the management and staff. Its Corporate Social Investment (CSI) initiatives are driven by a clear understanding of its environment and a strong knowledge of the resource gaps and pressing needs of communities and people within and beyond its areas of operations. The primary reason is the willingness and desire to give back to the people and communities that have been an encouragement in the bank's pursuit of enterprise as well as a conviction that

partnering with the public sector to address some areas of need is a healthy investment. As the bank gets more global, the focus and scope of its CSI policy are being fine-tuned and remodeled to reflect its status as a global brand. The bank's CSI policy therefore, reflects its commitment to global best practices, including Principles and Conventions of the United Nations on Sustainable Development, Environment, Human Rights, among others. It is also committed to Workplace Principles and Professional Ethics of the International Labour Organisation (ILO) and other global institutions dedicated to the enhancement of the common good.

n January 2012, Zenith Bank was recognised as one of the 30 outstanding global brands that are making sustainable impact on their operating environments in the area of Corporate Social Responsibility. The recognition was a prelude to the United Nations Development Programme’s (UNDP) Conference on Sustainable Development (‘Road to Rio’), held in Brazil in May 2012. Zenith Bank was honoured along with 30 other global brands which included Airbus, France; ConocoPhillips, USA; Credit Suisse, Switzerland; KLM, Netherlands; Olam International, Singapore; Unilever, Netherlands; Verizon, USA; Kia Motors, South

enith Bank has consistently recorded good ratings from both the international (Fitch Ratings, Standard & Poor’s) and local (Agusto & Co.) rating agencies. The ratings on Zenith Bank Plc are supported by its leading market position in all key performance indices. Zenith Bank has consistently put in place a robust system of corporate governance, bearing in mind the key elements of honesty, trust, integrity, openness and accountability as well as commitment to the organisation’s goals. To uphold strong corporate governance and transparency, the bank adopted a robust public disclosure policy. This is to forestall incidences of abuse, such as insider trading. The impressive growth pattern and performance over the years have earned the bank excellent ratings and recognition from local and international agencies. From a 2012 survey conducted by The Banker, an authoritative publication of the Financial Times of London, Zenith was adjudged the largest bank in Nigeria and the seventh largest in Africa on the basis of Tier-1 capital. Also, in July 2012, Forbes ranked Zenith the largest listed bank in Nigeria and the third largest listed company in West Africa. Forbes employed market capitalisation, turnover, and net profit and assets criteria to arrive at its ranking. In 2011, Standard & Poor’s reaffirmed Zenith Bank’s rating at B+/stable/B – the highest rating awarded to any Nigerian bank and in line with the country’s risk rating. In 2012, World Finance voted the bank as Best Nigerian Bank in Corporate Governance. In the end, Zenith’s value and competitive edge come down to a wining combination of people, talent, propriety, knowledge, equity, leadership, integrity and excellent relationship management. Over the years, Zenith Bank has redefined customer service standards and created diverse service delivery channels through a strategic deployment of its people, Information Communication Technology (ICT) and worldclass service.

Vanguard, MONDAY, OCTOBER 1, 2012 — 31

Banking & Finance HE Nigerian Export Import Bank, NEXIM, has disclosed that the establishment of the regional sealink project will help save Nigeria about N800 billion ($5 billion) annually, while it will unlock the opportunities in the country's maritime sector. According to a statement by Managing Director of the bank, Mr. Robert Orya, the sealink project will help unlock opportunities in the maritime sector through effective indigenous participation, thereby stimulating maritime-related employment as well as localizing some of the maritime freight payments of an average of $5 billion annually from import / export tonnages. Orya said the project, which is being sponsored by the Federation of West African Chambers of Commerce and Industry, FEWACCI and endorsed by both the ECOWAS Commission and the Maritime Organisation of West and Central Africa, MOWCA, will also help facilitate the realisation of the various Maritime-related laws like the Cabotage and MIMASA Acts and the implementation of the National Shipping Policy. He explained that the project will attract and stimulate private sector funding for the development of key maritime infrastructure, thereby improving the level of intra-regional formal trade and enhancing contribution of trade and exports to GDP. The NEXIM boss stated further that, “The sealink

BRIEFS

MasterCard, WFP partner on ‘digital food’ project By WILLIAM JIMOH & TOCHUKWU ANAETO

*From left; Bunmi Akinde, Senior Partner (Ernst & Young) & Entrepreneur of the Year Award West Africa Leader; Oladejo Seye, Special Adviser to the Lagos State Governor and Morris Atoki, Entrepreneur of the Year Award Coordinator for West Africa, when the Ernst and Young team paid a courtesy visit to the Lagos State Government.

Nigeria to save N800bn from NEXIM Bank’s sealink project By MICHAEL EBOH, RITA OBODOECHINA & WILLIAM JIMOH project will assist in solving road/rail infrastructural deficit challenges that affect regional integration and a major cause of the muted growth witnessed over the years in intra-African and ECOWAS trade levels of about 12 per cent and 10 per cent respectively.

e said, “The project will enhance the competitiveness of Nigerian exports, thereby improving the contribution of manufactured exports from the current level of under six per cent, enhancing local industrial capacity utilisation and attracting new investments. “Enabling NEXIM achieve its projected credit growth towards improving intra-regional trade from current in-

Lawmakers seek enhancement of revenue collection law By EBUN SESSOU HE Lagos State House of Assembly has disclosed that its decision to review the state’s revenue collection law is aimed at enhancing it, boosting the revenue generating capacity of the state and impacting positively on the lives of Lagosians. Speaking at the public hearing heralding the review of the law, Chairman, House Committee on Finance, Lagos State House of Assembly, Mrs. Adefunmilayo Tejuoso, said when concluded, the law will provide for the administration and collection of revenue due to the state and local government authorities. Tejuoso highlighted the need for every individual in the state to perform his/her civic responsibilities through regu-

ASTERCARD and the World Food Programme (WFP) have announced a global partnership on a digital food project that would be used to help people around the world break the cycle of hunger and poverty, using digital innovation. According to WFP’s Director of Communications, Public Policy and Private Partnerships, Nancy Roman, the game-changing partnership will combine MasterCard’s expertise in electronic payments systems with WFP’s global reach among the world’s hungriest populations to meet the nutritional needs of the most vulnerable. She said, “by drawing on MasterCard’s technical knowhow and international reach, WFP will further develop both its electronic voucher programme that enables hungry families around the globe to buy nutritious food in local markets as well as its online donation mechanism that engages individuals and brands in a global community working together to solve hunger.” Speaking further, Roman stated that in every stable market, WFP often distributes vouchers that are redeemable in local shops for food and other staple items in order to boost local economies as well as allow poor communities to receive food assistance with dignity through the project.

lar payment of taxes, saying that the provision of essential infrastructure and other basic amenities that would make life easier for the people can only be achieved when the people reciprocate government gesture by paying their taxes. The leader of the House, Dr. Ajibayo Adeyeye, who stood in for the Speaker, Adeyemi Ikuforiji, said the bill when eventually passed into law, will make revenue collection drive of the state more efficient, and consequently transform and touch lives of every Lagosian. Also speaking, Sanai Agunbiade, said the bill seeks to ensure probity and accountability while putting necessary machinery for tax collection and other levies in proper perspective through administrative restructuring as well as create a body that will be in charge of tax assessment in collaboration

with the local government representatives in place. Mr. Mashuud Fashola, a lecturer at the Department of Economics, University of Lagos, commended both the executive and the legislative arms for deeming it necessary to propose a better way for revenue administration and collection in the state but pointed out some areas that can be improved upon in the bill, which was promised to be looked at by the legislators. The Attorney-General and Commissioner for Justice, Mr. Ade-Ipaye explained that the new addendum to the bill that borders on estates and probates, ismeant to improve the practicability of the revenue collection and administration in the state, while not undermining its workability in all ramifications when it is eventually passed into law.

tra-regional trade levels to a minimum of 15 per cent annually in the short/medium term.” Orya said the sealink project becomes necessary following the challenges of road infrastructure as well as the absence of rail link within the region, in addition to the comparative low budgetary cost and short implementation timeline for the sealink project compared to either a regional road or rail project. He said NEXIM commissioned a feasibility study on intra-regional trade flows and the viability of establishing a dedicated sealink in West Africa, due to the partial realisation of its intra-regional trade facilitation and operational objectives as well as the logistic issues of high intraregional freight costs and shipment delays arising from trans-shipment arrangements that are largely through Europe. These, he said, made cargo delivery within the region an average of 45 - 60 days. “Justifications supporting the establishment of a dedicated regional sealink project also includes the fact that destination countries are a portfolio mix of high income and low income countries bringing a good balance of cargo tonnage and trade flow. “High transportation costs and excessive transit time making intra-regional trade non-competitive, with West and Central African transport and logistics costs identified as one of the highest in the world.

Regulators commend Unity Bank for transparency WO principal regulatory agencies supervising promotions in the country have commended Unity Bank Plc for sticking to the principles of transparency and fairness in the handling of its savings promotion known as AIM, SAVE and WIN. The agencies are the Consumer Protection Council of Nigeria (CPC) and the National Lottery Regulatory Commission (NLRC) both of which oversaw the 2nd national draw of the bank’s savings promotion held in Lagos. Head, Lagos sector of the Consumer Protection Council, Mrs. Ngozika Obidike rated the conduct of the draw high and credible and suggested to the organisers to fully automate the selection system as a way of further raising standards.

C M Y K

32 — Vanguard, MONDAY, OCTOBER 1, 2012

Banking & Finance BRIEFS Interbank rates fall to 10.58%

he Nigerian interbank lending rates dipped marginally last week, to an average of 10.58 per cent, from 10.83 per cent last week, as the maturity of Treasury Bills, worth N95 billion, helped boost liquidity in the market. The interbank market opened with a cash balance of about N326.6 billion last Friday, compared with N317 billion balance in the previous week. The overnight placement also fell to 10.50 per cent from 11 per cent two weeks ago, while call money was unchanged at 11 per cent. The secured Open Buy Back, OBB fell marginally to 10.25 per cent, compared with 10.5 per cent two weeks ago, 1.75 percentage points lower than the CBN's 12 per cent benchmark rate and 25 basis points above the Standing Deposit Facility, SDF rate.

CIBN partners EFCC, CBN, others, insists on commercial court

n a bid to ensure that the Nigerian banking profession is not only restored to its leading position but also placed at par with other leading economies, the Chartered Institute of Bankers of Nigeria (CIBN) is partnering with key stakeholders and institutions in the country. Among the key organisations are the Economic and Financial Crimes Commission (EFCC); Central Bank of Nigeria, Unity Bank Plc and other government and private bodies within and outside the country with a view to taking the institute and the banking profession to greater heights. In a statement made available to Vanguard, the President/ Chairman of Council of the Institute, Mr. Segun Aina, emphasised on the need to partner with relevant stakeholders on capacitybuilding and training of staff in the banking industry as well as other sectors of the economy. Aina stated this during the Institute’s dialogue with the stakeholders in Abuja, He encouraged the EFCC, CBN and Unity Bank to engage the services of the CIBN Practice Licence holders and other well experienced professional bankers for their consultancy services, debt recovery, forensic audit, training and other services. C M

*From left: Partner, KPMG Professional Services, Mr. Ayo Othihiwa; Chief Finance Officer, Stanbic IBTC Bank Plc, Mr. Ronald Pfende; and Partner, Audit Services, KPMG, Mr. Anthony Sarpong, at the inaugural forum for Chief Finance Officers (CFOs) of banks on tax issues in the Nigerian banking sector, organised by KPMG in Lagos.

FGN Bonds to be included in JP Morgan’s index today …Foreign reserves rise to $41.12 BY MICHAEL EBOH with Agency Report

nalysts are predicting a significant rally in Federal Government of Nigeria’s, FGN, bonds, this week, as the bonds are included in the JP Morgan’s

Government Bond Index – Emerging Market series today. JP Morgan said Nigeria’s bonds will be brought into the index in three phases from October 1 to December 3. This was even as Nigeria’s

foreign exchange reserves appreciated by 7.16 per cent to close the month of September at $41.12 billion. The reserves figure rose from $38.37 billion recorded at the end of August 2012, hitting a 29-month high, compared to $41.16 billion

recorded on April 9, 2010. The reserves stood at $34.39 billion a year ago. Concerning the inclusion of the bond in the JP Morgan Index, one dealer said, “We expect yields to come down further as more offshore investors scramble for Nigeria’s bonds in the coming days.” Also, analysts at FBN Capital said that slowing inflation would also support the rally of the Nigerian bonds. According to the analysts, our expectation is that yields on naira debt instruments will move within a range in the days ahead “Further ahead, we see further legs on the rally in the FGN bond market, given the factor of the JP Morgan index in addition to improving inflation prospects,” the analysts at FBN Capital stated. The analysts are of the view that Nigeria’s bonds inclusion in the index will continue driving sustained demand for the bonds in the weeks ahead. Yields on the bonds fell by 20-30 basis points in two weeks ago, they said. Dealers said yields on Nigerian bonds have plummeted more than 300 basis points since the midAugust announcement that Nigeria would be included in the JP Morgan Government Bond Index - Emerging Markets.

Federal allocation: Abia reassessing IGR potential — Onuigbo BY EMMANUEL ELEBEKE

ommissioner for Finance, Abia State, Sam Onuigbo has said the dwindling monthly allocation from the federation account has gingered the state government to re-assess the potentials in internally generated revenue in the state, saying that the government could no longer afford to rely on the monthly allocation from Federal Government to the state, going by the imminent danger that could result from the decrease. Even as he decried the poor policy formulation and execution in the country by various agencies, Onuigbo urged government at all levels to adopt new strategic management and planning actions that would lead to the actualisation of the set objectives of transforming the Nigerian economy. Speaking after receiving an award of fellowship from the Nigerian Institute of Management, NIM, in Abuja, Onuigbo said Abia State

Government is already restrategizing with new policies that would help them reposition the state for a better service delivery. ‘’We are taking critical decisions in Abia State. When you take such decisions, they are critical as they are decisions taken to drive an organisation forward. We have already taken a position to move the state forward. In terms of internally generated revenue, we have reassessed our approaches and are now adopting new ones. We are having one agent for collection of revenue. ‘’We know that what we receive from the federation account is dwindling. So, we are making sure that we make use of the potentials that abound in our state, especially in Aba because Aba alone, the way it is going, can generate revenue that can power the state. We are also looking at some other remunerations and qualities I do not intend to disclose, to reposition the state to move in the right direction,” he said. ‘’As a nation that is still

evolving, we are all bringing into play different style of management, especially strategic management and some planning in terms of execution, in terms of quality formulation. In Abia, we ensure that whatever policy formulated is followed through to ensure that we achieve set objectives. We know we have had disruptions in the system. After about close to 13 years of democratic dispensation , we are still trying to find the rhythm,” he noted. On the proposed Aba dry port in Isi Ala Ngwa Local Government Area, the commissioner said though, the Federal Government designated Aba as one of the dry ports in the country, which is yet to be functional, the state government is determined to ensure that the dream comes true as it had done so much that is needed to achieve the dry port. ‘’Though, the port has been there for long before the governor assumed office, the present government is working on it vigorously to

make sure that we have a dry port. We are confident that it will go a long way in reducing the challenges our importers and industrialists are facing going to Lagos, Calabar and Port Harcourt to bring their goods. It is top priority for us and we will continue working hard to achieve it,” he insisted. He said that the award had humbled him as a public servant and would spur him to work harder for greater serve delivery. ‘’I feel humbled and honoured for this recognition. I regard it as a privilege. I know there are some other people who are qualified. I think, it is something unique in that the NIM has done a careful work by recognising my 30 years of membership with the institute. ‘’This award will serve as a tonic in the way I do things and encourage me to do more. "It will certainly be a challenge for me to do more. I will bring this to bear in management issues,” he said.

Vanguard, MONDAY, OCTOBER 1, 2012 — 33

Corporate Finance BRIEF Academy Press to embrace full security printing

SEC to postpone share certificate dematerialisation deadline

… pays N37.8m dividends By NKIRUKA NNOROM CADEMY Press Plc has said that it will take advantage of the planned Central Bank of Nigeria, (CBN)’s ban on importation of Security and sensitive print materials to upgrade its facilities to full blown Security printing outfit. Making the disclosure at the 48th annual general meeting in Lagos, the Chairman, Mr Babs Animashaun, said that already, the sister company, Academy Press Business Forum, is being re-tooled to take responsibility of the new project. According to him, this project and other expansion measures put in place by the company would enable it to generate a turnover of N5billion in near future and help enhance its market share and activities in the stock market. According to him, the company was able to conclude some expansion projects in capacity and new technology at the tail end of the financial year, adding that the expansion are expected to ginger more opportunities for the company in the market place. With dividend pay-out of 7.5kobo per unit of 50kobo share due to every shareholder of the company, he explained that the company recorded a turnover of 2.3billion and profit before tax of N156million, against N165million recorded in 2011. “The company was able to sustain the previous year’s turnover, achieving same N2.3billion as in previous year. However, the profit before tax decreased by six per cent, from N165million in the previous year to N156million.

he decrease was attributable to the operational cost increase due to inflation and Naira value loss that characterized the market in the year. “The sustained result despite the harsh economic environment was an indication of the workings of skill and capacity repositioning process of the company. The target in the immediate future is to continue along this line but with increased aggression while identifying existing and emerging opportunities in the market for business growth.”

*From left; President/Chairman of Council, Chartered Institute of Stockbrokers (CIS), Mr. Ariyo Olushekun; Registrar/CEO, Mr. Emmanuel Ajayi and Managing Director/CEO, Camry Securities Limited, Atiku Kamar;during a press conference on 2012 Stockbrokers' annual conference, held at the institute’s office in Lagos last week.

Stories by PETER EGWUATU

ecurities and Exchange Commission (SEC) has disclosed that it may postpone the deadline for share certificate dematerialisation earlier fixed for 1st January, 2013 if adequate enlightenment is not carried out. Director-General, SEC, Ms. Arunma Oteh, who disclosed this, said that the idea to postpone the deadline was as a result of the inability of the Committee on dematerialisation to organise an enlightenment programme in all the geo-political zones in the country to enlighten investors on the need and benefits of dematerialising share certificates. The Committee is expected to advise the Commission on what to do to implement full dematerialisation after the exercise. According to her, “Once the Committee on dematerialisation has finished its enlightenment programme, we may now set a new date. Though, any person who wants to hold physical share certificate to show as evidence of ownership is free to do so, but for those who want to play the market on daily basis,dematerialisation is necessary and a must for them to allow for easy transfer and settlement of transaction. Meanwhile, Chairman of the Committee on dematerialisation, Mr. Emeka Mmadubuike, said, “The security issue in some parts of the coun-

try has been the major challenge why the Committee has not been able to arrange the enlightenment programme. “So now, we are planning to reshuffle the places where we can carry out the enlightenment programme. Once that is done, we will then inform the Commission.”

t would be recalled that the SEC had in a notice stated that “All share certificates dematerialised on or before January 1, 2013 shall be at no cost to the shareholder, but certificates dematerialised after this date shall be at a cost. “Accordingly, allotment of shares following public offerings shall

henceforth be by electronic processes that will domicile shareholding directly with the Central Securities Clearing System (CSCS). This will facilitate speedy processing of offers and give investors simultaneous access to their shares for desired transactions. “However, should an allottee insist on being issued a share certificate, despite its disadvantages, a certificate shall be issued in accordance with sections 146 and 147 (1) of the Companies and Allied Matters Act (CAMA). Meanwhile, dematerialisation is the process of converting physical share certificates into electronic form i.e. crediting of equivalent number of shares to a depository account electronically. For dematerialisation of shares, you have to open a depository account with a Central Securities Clearing System (CSCS) Limited. The benefits of include: Zero risk of loss of share certificate/ misplacement / theft / damage of share certificates, No risk of bad deliveries, No stamp duty on transfer of shares, Faster transfer of shares, among others.

Union Bank shareholders’ fund hits N188.37 bn in six months U NION Bank of Nigeria Plc has recorded a shareholders’ fund of N188.37 billion for the half year ended June, 2012, from a negative of N184.96 billion in the same corresponding period. The bank also declared a N13.6 billion profit for the half year result despite the harsh operating environment which continues to affect the banking industry. In its unaudited half year result released to the Nigeria stock Exchange (NSE), weekend, the bank posted a Profit After Tax (PAT) of N13.6 billion as against the loss of N44.01 billion recorded during the corresponding period of 2011. The financial report also showed a Profit before Taxation (PBT) of N9.793 billion as against N65.679 billion loss posted last year. It was the PBT plus deferred tax income of N3.758 billion that gave the Profit of

N13.6 billion. The performance may be attributed to full recapitalization, injection of new capital; support from AMCON with the clean- up of bad loans; faster service delivery to customers and other growth spurring polices of the Funke Osibodu led management team. The Group Managing Director/Chief Executive, Mrs. Funke Osibodu, had while presenting the first quarter result, said; “The bank has indeed begun to move forward in the right direction. We have been able to turn around our loss position of the previous years and more significantly, we now have a healthy and positive shareholders’ fund”. Total comprehensive income for the period also rose to N11.99 billion as against the loss of N43.50 billion posted during the corresponding

period last year. This translated to earning per share of 221 kobo compared to the loss of 326 kobo recorded in 2011. It would be recalled that in the first quarter, the bank posted an unaudited gross earnings of N25.51 billion (Group N29.84billion) while profit after taxation was N6.32 billion (Group N7.62 billion). Similarly, the Group recorded a PAT of N16.14billion compared to a loss ofN40.30 billion posted during the corresponding period in the previous year. Likewise, the group assets grew 1.07 percent to N1.049 trillion from N1.038 trillion recorded last year. Group total comprehensive income rose to N19.475 billion compared to N39.410 billion loss posted in 2011.This also translated to earning per share of 251 kobo as against a loss per share of 305 kobo recorded last year. C M Y K

34 — Vanguard, MONDAY, OCTOBER 1, 2012

Corporate Finance BRIEFS Oando Nigeria falls to 9-Year low on share offer

ando Plc, the Nigerian Energy Company that announced a share offer last week, fell to the lowest in nine years on concern the amount raised will be insufficient to cover debt. The stock dropped by the daily limit of five percent to close at N12.21, its lowest since May 2003. Oando plans to raise N35 billion in an offer to existing shareholders in the fourth quarter to cut debt and increase crude exploration, Chief Executive Officer, Wale Tinubu, said in a statement to the Johannesburg Stock Exchange. He gave no details of Oando’s debts. “Investors’ perception is that compared to the company’s debts, the amount they are raising is too small,” Raheem Mohammed, chief operating officer of Kundila Finance Ltd., said. Oando has expanded its operations in Africa’s top oil producer to include crude and gas exploration and production, with additional plans to build a fuel-receiving terminal and refinery in Nigeria’s commercial capital, Lagos. Oando shares have fallen 45 percent this year, compared with a 24 percent rise in the Nigerian Stock Exchange All-Share Index.

Emerging stocks heading for best month since January

eveloping nation stocks rose, extending the best monthly gain since February, as China injected a record amount of funds into its financial system and on speculation Spain may request a bailout. The MSCI Emerging Markets Index (VXEEM) increased 0.3 percent to 1,001.23 in New York, bringing its advance this month to 5.7 percent. The Shanghai Composite Index (SHCOMP) jumped 1.5 percent as the yuan hit the strongest level since 1993 and SAIC (600104) Motor Corp., China’s largest car maker, surged the most in four months. India’s benchmark gauge increased to a 14month high and the Czech PX index rose the most in two weeks. China’s money-market rate completed the biggest weekly drop in 11 months after the central bank’s actions to ease a cash crunch before next week’s holiday. C M Y K

Deputy Governor, Lagos State, Mrs. Adejoke Adefulire (centre) flanked by the Lagos State Commissioner for Environment, Mr. Tunji Bello (left); and Minister for Water Resources, Mrs. Sarah Ochekpe, at the sensitization & flag-off programme of the Lagos State Water Regulatory Commission in Lagos.

Investment value on NSE appreciates by N216bn BY MICHAEL EBOH & WILLIAM JIMOH

he total value of investment on the Nigerian Stock Exchange, NSE, appreciated last week by N216 billion, as the key market indices, the All-share index and market capitalisation both appreciated by 2.7 per cent. Specifically, the

capitalisation which opened the week N8.066 trillion, rose by N216 trillion to close the week at N8.282 trillion, while the index garnered 674.46 basis points to close the week at 26,011.64 points, from 25,337.18 points at which it opened the week. Thirty-five stocks, led by Dangote Cement Plc, recorded share price

appreciation. Dangote Cement’s share price rose by N6.74 to close the week at N123 per share, from N116.26 per share at which it opened the week; Unilever Nigeria Plc followed with a gain of N3.60 to close at N42.11 per share, while Ashaka Cement Plc garnered 1.32 to close at N15.10 per share. Other share price gainers

include: Cadbury Nigeria Plc N1.32, Lafarge WAPCO Plc N1.01, Dangote Flour Mills Plc N0.84, PZ Cussons Nigeria Plc N0.41, Roads Nigeria Plc N0.38, First Bank of Nigeria Plc N0.35 and Portland Paints and Products Plc N0.31 among others. On the contrary, 33 companies recorded a decline in their share prices, led by Flour Mills Nigeria Plc, with a loss of N6.25 to close at N61.67 per share, down from N67.92 per share at which it opened the week; UAC Nigeria Plc followed with a loss of N3.24 to close the week at N40 per share and Nigerian Breweries Plc shed N3 to close at N137 per share. Other share price losers include: Oando Plc N2.16, Union Bank Nigeria Plc N1.62, Julius Berger Nigeria Plc N1.30, UACN Property Development Company N1.20, Conoil Plc N0.98, International Breweries Plc N0.93 and Access Bank Plc N0.84 among others. Equity trading, however, declined last week by 36.77 per cent, as investors exchanged 1.704 billion shares valued at N14.539 billion I n 24,202 deals, in contrast to the previous week’s turnover of 2.695 billion shares valued at N15.701 billion in 24,717 deals. The Financial Services sector recorded the highest patronage in the sectorial analysis, accounting for 69.07 per cent of the total market turnover, with 1.177 billion shares valued at N9.218 billion in 13,236 deals.

Dangote pledges to restore confidence in stock market By NKIRUKA NNOROM

he President of Council of the Nigeria Stock Exchange, Alhaji Aliko Dangote has said that restoring investors’ confidence will be the major focus of his administration in the coming months. Making the remark at the 51st annual general meeting of the NSE in Lagos, Dangote said, “We want to keep encouraging Nigerians to keep investing in the market by doing a lot of things. The whole issue is about confidence and I think when we succeed in bringing confidence back to the market, a lot of Nigerians will be investing in the market. “As we continue our reforms programmes, we remain confident that by year’s end, the market will be well on its way to recovering its vibrancy

and regaining investor confidence.” He observed that the slowdown in the bonds market is gradually driving investors back to the equity, while attributing the rebound recorded in the last one month to the factor. On the listing of off-shoot companies from power sector, he said that the council would prevail on the government to list their 49 per cent holding, as other investors might not be willing to dilute their stake. “In line with global markets, our market struggled throughout 2011. While investors and market operators grappled with difficult local conditions, the market proved it was not isolated from events affecting local and global financial markets and economies. “This trend, however, was counterbalanced by the NSE’s delivery of key initiatives for

the development of the capital market. Throughout the year, the NSE maintained focus on transforming the Exchange and reforming the market to be more efficient,” he said. He stated that despite the many reforms embarked upon by the NSE and the and Exchange Commission (SEC), other financial market events - interest rates, banking reforms and challenges resulting from the Eurozone debt crisis, marred investors’ appetite for shares. “The market saw no noteworthy rally throughout the year, as many fund and asset managers continued to cut their equity exposure and/ or sell down to cover deteriorating positions elsewhere.” Analysis of the figures posted during the year showed that the total market capitalization dropped to N10.28 trillion, as against

N10.33 trillion as at December 30, 2010, representing 0.48 per cent decline. “The introduction of the NewGold Exchange Traded Fund (ETF) and increases in state and corporate bond issues held up the market capitalization. However, market capitalization of listed equities suffered a slightly different fate. “At year-end 2010, the equities market capitalization was a healthier N7.92 trillion, but by December 30, 2011, it had dropped to N6.54 trillion, a 17.42 percent decline. At year-end, the market capitalization of all 201 listed equities – 198 stocks and 3 preference stocks – accounted for 63.62 percent of total market capitalization, while in 2010, 217 listed equities accounted for 76.67 percent of the total market capitalization,” Dangote further stated.

1.41

1.35 5.52 1.01 5.81 43.24

28.80 9.74

Livestock/Animal Specialities Livestock Feeds Plc

CONGLOMERATES Diversified Industries A.G. Levents Nigeria Plc SCOA Nigeria Plc Transnational Corporation Chellarams Plc UACN Plc

CONSTRUCTION/REAL ESTATE Non-Building/Heavy Construction Julius Berger Nig Plc Roads Nigeria Plc

10.03 36.19 3.09 2.88

24.89 38.51

9.46 0.64 0.57 3.59 11.45 1.77 0.50 14.50 3.18 19.20 1.07 0.70 1.15 3.17 0.88 7.14 1.54 4.60 9.13 0.50 0.50 16.50

0.50 0.61 0.50 0.50 0.50 1.31 0.50 0.50 0.50 1.55 0.50 0.61 0.50 0.50 0.50 0.50 0.50 0.50 0.52 0.52 0.50 0.50 0.52 0.50 0.50 0.50 0.50 0.50

0.50 0.50

0.50 2.02 0.60

Household Durables Beta Glass Co Plc Nigerian Enamelware Plc Vitafoam Nig. Plc Vono Products Plc

Personal/Household Products PZ Cussons Nigeria Plc Unilever Nigeria Plc

FINANCIAL SERVICES Banking Access Bank Plc Afribank Nigeria Plc Bank PHB Plc Diamond Bank Nigeria Plc Ecobank TRANSNATIONAL INCORPORATION Fidelity Bank Plc FinBank Plc First Bank of Nig. Plc First City Monument Bank Plc Guaranty Trust Bank Plc NPF Micro-Finance Bank Plc Intercontinental Bank Plc Oceanic Bank International Plc Skye Bank Plc Spring Bank Plc Stanbic IBTC Bank Plc Sterling Bank Plc UBA Plc Union Bank Nig. Plc Unity Bank Plc Wema Bank Plc Zenith Bank Plc

Insurance Carriers, Brokers and Sector AIICO Insurance Plc Continental Reinsurance Plc African Alliance Insurance Cornerstone Insurance Company Consolidated Hallmark Insurance Custodian and Allied Insurance Plc Equity Assurance Plc Goldlink Insurance Plc Great (Nig) Insurance Plc Guaranty Trust Assurance Plc Guinea Insurance Plc Intercontinental Wapic Insurance Plc International Energy Insurance Plc Investment and Allied Assurance LASACO Assurance Plc Law Union & Rock Insurance Plc Linkage Assurance Plc Mutual Benefits Assurance Plc NEM Insurance Co. (Nig) Ltd Niger Insurance Co. Plc OASIS Insurance Plc. Prestige Assurance Co. Plc Regency Alliance Insurance Sovereign Trust Insurance Staco Insurance Plc Standard Alliance Insurance UNIC Insurance Plc Universal Insurance Plc

Mortgage Carrier, Broker and Sector Aso Savings and Loans Plc Resort Savings & Loans Plc

Other Financial Institutions Crusader (Nigeria) Plc Deap Capital Management & Trust Plc Royal Exchange Assurance

0.50 2.02 0.63

0.50 0.50

0.57 0.71 0.50 0.50 0.50 1.40 0.50 0.50 0.50 1.60 0.50 0.61 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.54 0.50 0.50 0.50 0.50 0.50 0.50

8.62 0.64 0.55 3.45 11.12 1.76 0.50 14.85 3.20 19.15 1.07 0.70 1.15 3.18 0.88 7.20 1.60 4.50 7.51 0.50 0.50 16.30

25.30 42.11

10.03 34.39 3.06 2.88

23.95 580.00

0.50

22.63 580.00

Food Products-- Diversified Cadbury Nigeria Plc Nestle Nigeria Plc

8.55 4.99 61.67 2.28 5.77 0.79

0.50

7.71 4.90 67.92 2.12 6.10 0.67

Food Products Dangote Flour Mills Plc Dangote Sugar Refinery Plc Flour Mills Nigeria Plc Honeywell Flour Mill Plc National Salt Co. Nig Plc UTC Nigeria Plc

39.00

5.19

39.00

Beverages-Non-Alcoholic 7-UP Bottling Company Plc

3.44 260.00 12.98 137.00 0.89

0.50

100.00

10.92

27.50 10.22

1.33 5.42 1.15 5.81 40.00

1.61

0.50 37.01 15.00

0.50

Closing Price (N)

5.46

3.28 260.00 13.91 140.00 0.89

HEALTHCARE Medical Supplies Morison Industries Plc Healthcare Providers Union Diagnostics & Clinicals Services

0.50

Beverages-Brewers/Distillers Champion Breweries Plc Guinness Nigeria Plc International Breweries Plc Nigerian Brew Plc Premier Breweries Plc

100.00

Real Estate Investment Trusts Skye Shelter Funds CONSUMER GOODS Automobile/Auto Parts DN Tyres & Rubber Plc

12.12

0.50 36.80 15.45

1st fTier Securities AGRICULTURE Crop Production FTN Cocoa Processors Plc Okomu Oil Palm Plc Presco Plc

Real Estate Development UACN Property Development

0.50

Oil and Gas and Products Petroleum Products Capital Oil Plc

Company

Opening Price (N)

Capital Market

300,000

50,000

78,000 60,000 1,223,967

100 2,040,000

5,843,812 677,000 1,000 50,000 6,200 1,352,000 52,000 315,000 2,000,000 1,698,475 20,000 1,172,778 2,749 1,670,890 105,500 1,551,606 20,050 49,164,262 5,943,548 5,943,548 40,000 60,000 55,000 1,500 50,200 100 288,941,018 533,100

27,809,551 646,608 13,287,533 3,912,912 3,823,185 12,778,048 1,000 42,426,490 4,233,069 7,979,628 56,000 73,200 91,000 2,681,303 1,006,032 3,882,750 12,448,537 20,596,968 3,552,089 9,000 4,050,000 19,107,676

262,445 942,184

225 10,620 4,443,981 11,923

636,122 269,562

6,411,483 685,914 268,165 2,127,056 1,388,921 36,000

69,093

10,000 255,158 650,356 3,669,814 1,000

4,200

355,582

325,901 232,519

200,000 264 11,120,666 100 534,124

2,179,630

909 189,340 1,416,646

1,000

Quantity Traded

0.50

10.54

0.61 2.02 0.66

0.50 0.50

1.06 1.20 0.50 0.50 0.50 3.51 0.50 0.69 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.90 0.50 2.50 0.50 0.50 0.50 0.50 0.50 0.50

11.10 3.39 2.30 9.27 4.30 3.20 9.50 16.12 8.30 20.50 1.78 1.78 13.50 10.17 2.18 11.38 2.91 11.70 5.38 1.92 1.75 16.70

43.50 31.25

15.58 42.66 6.75 3.67

29.20 470.00

19.90 16.20 95.00 6.60 6.70 0.88

0.50

9.52

0.50 2.02 0.50

0.50 0.50

0.50 0.85 0.50 0.50 0.50 2.00 0.50 0.50 0.50 0.95 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 1.90 0.50 0.50 0.50 0.50 0.50 0.50

4.26 0.64 0.53 2.05 1.65 1.20 0.00 7.95 3.60 11.64 0.00 0.87 0.00 3.90 0.73 6.30 0.95 2.17 1.96 0.50 0.52 11.45

27.00 22.56

12.71 36.19 4.78 2.66

10.17 367.83

4.31 4.02 57.00 2.31 3.80 0.50

,39.00

186.00 5.23 72.50 0.93

255.00 7.10 100.00 1.01 51.49

2.23

0.50

97.00

11.59

32.96 3.01

1.45 5.52 0.50 6.43 28.70

0.48

0.50 14.53 6.40

Year Low

4.63

0.50

100.00

20.15

62.26 8.28

2.54 8.28 1.82 7.60 42.50

0.66

0.64 24.58 8.30

Year High

0.00

0.00 0.00 0.03

0.00 0.00

0.09 0.10 0.00 0.00 0.06 0.43 0.00 0.00 0.00 0.08 0.00 0.00 0.00 0.02 0.06 0.10 0.00 0.36 0.36 0.01 0.01 0.14 0.03 0.07 0.00 0.00 0.00 0.00

0.80 0.00 0.00 0.00 0.28 0.22 0.00 1.34 0.69 1.61 0.00 0.18 0.00 0.85 0.50 0.54 0.22 0.13 7.59 0.11 1.34 1.57

1.29 1.32

3.90 1.61 0.70 0.00

0.28 15.94

0.54 0.71 4.50 0.26 0.73 0.06

3.70

12.12 0.35 4.50 0.00

0.00

11.75

1.66

3.26 3.66

0.28 0.35 0.22 0.31 7.03

0.04

0.01 7.94 1.80

E.P.S.

0.00

0.00 0.00 16.67

0.00 0.00

5.56 10.20 0.00 0.00 8.33 4.88 0.00 0.00 0.00 17.25 0.00 0.00 0.00 25.00 8.33 5.00 0.00 1.39 1.39 50.00 50.00 6.43 16.67 7.14 0.00 0.00 0.00 0.00

5.83 0.00 0.00 0.00 25.91 6.68 0.00 6.96 6.20 8.74 0.00 5.44 0.00 5.07 5.44 14.81 4.68 19.23 0.28 4.82 0.43 7.83

20.93 20.46

3.26 22.48 7.34 0.00

37.57 27.96

16.91 14.38 16.89 16.92 5.75 8.83

13.92

19.98 16.29 22.22 0.00

0.00

8.51

7.33

10.11 2.26

5.18 15.77 3.64 20.74 4.14

15.00

50.00 2.77 4.37

P.E. Ratio

13.77 2.41

IT Services NCR (Nig) Plc Tripple Gee and Company Plc

0.50

Processing Sysetms Chams Nigeria Plc

0.50

4.90 2.08 5.92

Speciality Interlinked Technologies Plc Transport-Related Services Airline Services and Logistics Plc Nigerian Aviation Handling Company

0.50

1.57 2.01 4.20 4.36 Road Transportation Associated Bus Company Plc

0.50 Printing & Publishing. Academy Press Plc Learn Africa Plc Longman Nigeria Plc University Press

6.50 1.12

0.50

3.00

1.97 1.82

Media/Entertainment Daar Communications Plc

Hotels/Lodging Capital Hotel Ikeja Hotel Plc

Courier/Freight/Delivery Red Star Express Plc Employment Solutions C & I LEASING PLC

Automobile/Auto Part Retailers Incar Nig. Plc RT Briscoe Plc

Afromedia Plc

SERVICES

0.50

20.50 0.50 20.68 2.38 11.00 115.00 32.29 130.00

Petroleum and Petroleum Products African Petroleum Plc Beco Petroleum Plc Conoil Eterna Oil and Gas Plc Forte Oil Nig Plc Mobil Oil Nigeria Plc MRS Oil Nigeria Plc Total Nigeria Plc Hospitality Tantalisers Plc

0.63 13.76

Intergrated Oil and Gas Services Oando Plc

3.98 12.71 13.28 4.30 1.05 2.92 0.66

INDUSTRIAL GOODS Packaging/Containers Abplast Products Plc Beta Glass Co. Plc Greif Nigeria Plc Nampak Nigeria Plc Poly Products (Nig) Plc Studio Press (Nig) Plc W.A. Glass Ind. Plc OIL AND GAS Energy Equipment and Services Japaul Oil & Maritime Service

1.44 0.50

Mortgage Carriers, Brokers and Se Abbey Building Society Plc Union Homes Savings and Loans

1.90 0.50

1.38

Paper/Forest Products Thomas Wyatt Nig. Plc

Electronic and Electrical Products Cutix Plc Nigerian Wire & Cable Plc

0.50

10.55

Non-Metalic Mineral Mining Multiverse Plc

5.98

Metals Aluminium Extrusion Ind Plc

8.26

2.19 1.89

13.78 8.01 28.90 4.83 116.26 0.50 0.81 54.99 3.18 1.90 10.93

NATURAL RESOURCES Chemicals BOC Gases Plc

Tools and Machinery Nigerian Ropes Plc

Packaging/Containers Avon Crowncaps & Container Nigerian Bags Manufacturing Company

INDUSTRIAL GOODS Building Materials Ashaka Cement Plc Berger Paints Plc CAP Plc Cement Co. of Northern Nig. Plc Dangote Cement Plc First Aluminium Nigeria Plc DN Meyer Plc Lafarge WAPCO Plc Portland Paints & Products Nig Plc Paints & Coatings Manufacturers Premier Paints Plc

0.50

ICT Telecommunications Starcomms Plc

0.50

Computers and Peripherals Omatek Ventures Plc

5.05 1.15 1.55 36.00 1.64 0.92 8.59 3.02

ICT Computer Based Systems108 Courteville Investment Plc

Pharmaceuticals Ekocorp Plc Evans Medical Plc Fidson Healthcare Plc Glaxo Smithkline Consumer Nig May & Baker Nigeria Plc Neimeth International Pharm Nigeria-German Chemicals Plc Pharma-Deko Plc

Opening Price N

2.17 5.75

4.90

0.50

1.57 2.01 4.20 4.55

0.50

6.60 1.04

0.50

3.00

1.97 1.86

0.50

20.50 0.50 19.70 2.42 10.50 115.00 32.29 130.00

11.60

0.59

3.98 9.53 13.28 4.30 1.05 2.78 0.66

1.44 0.50

2.21 0.58

0.50

1.38

0.50

10.55

5.98

7.85

2.09 1.91

15.10 8.01 28.90 4.90 123.00 0.50 1.06 56.00 3.15 1.90 10.93

0.50

13.77 2.41

0.50

5.05 1.15 1.09 36.00 1.65 1.15 8.85 3.02

Closing Price N

70,350 319,045

173,940

61,200 45,000 4,322 691,141

10,000

800 1,623,561

309,000

278,000

240 308,808

5,454

82,191 200 89,695 205,000 239,046 10,072 63,206 10,127

5,551,200

8,515,649

6,888 1,047,843 100 29,198 200 84,311 2,749,340

2,000 1,000

609,984 15,000

13,870

1,000

5,000

2,000

10,000

18,196,178 2,894,186

2,974,931 1,000 12,329 121,872 317,515 10,374 61,625 1,289,730 3,167,600 10,000 1,000

2,307,692

6,793 5,512

103,400

767,300

1,000 250,000 25,993,045 10,644 246,321 152,720 1,927 100

Quantity Traded

Stock Market Report

0.51

5.15 2.78 11.75

1.57 6.50

4.90

0.50

4.60 3.60

8.00 6.82 0.80

3.17

0.48

3.00 1.33

0.90

2.65

1.97 1.30

3.68

0.50

400 2.07

1.64

3.67

4.33 3.65

0.72

539,000

141.00 63.86 195.50

163.50 2,100 240.00

27.99 0.50 0.50 5.71 3.89

1.87

3.98 12.71 13.97 3.60 1.05 2.92 0.63

1.33 0.50

1.62 2.58

0.50

1.38

0.50

10.70

6.80

8.26

5.94 1.47

12.00 8.10 15.16 4.16 95.00 0.50 1.02 36.58 5.11 0.51 10.93

0.50

3.25 3.25

0.50

5.31 0.70 0.83 2.58 3.61 0.95 0.95 4.28

Year Low

37.10 0.70 32.60 5.59

78.97

0.97

3.98 15.58 15.03 4.30 1.86 2.92 0.63

1.51 0.99

2.50 2.58

0.50

1.38

0.50

12.39

9.20

8.69

6.91 3.60

30.00 12.57 43.98 15.49 132.51 0.75 3.51 48.05 5.28 3.36 13.40

1.47

9.31 3.59

0.50

0.52

5.31 1.45 3.20 23.11 5.61 1.96 12.91 200

Year High

0.87

0.51 0.80

0.00

0.00 0.13

0.26

0.00

0.22 0.69

0.08

0.54

0.00 0.16

0.04

13.32 3.32 11.91

4.93 0.00 6.02 0.67

6.95

0.16

0.00 3.90 0.00 1.22 0.17 0.07 0.00

0.05 0.00

0.13 0.00

0.00

0.13

0.93

0.00

0.15 0.19

1.59 1.71 1.76 1.80 8.01 0.00 0.00 1.05 0.36 0.18 0.00

0.00

6.49 0.00

0.04

0.05

0.06 0.00 0.27 8.88 0.21 0.08 0.00 0.00

E.P.S

4.22 8.75

0.00

0.00 27.69

12.19

0.00

34.09 2.12

11.25

4.91

0.00 8.19

12.75

11.11 19.23 17.07

6.99

7.40 0.00

4.17

6.06

0.00 3.26 0.00 3.52 6.18 41.71 0.00

28.80 0.00

13.15 0.00

0.00

85.77

7.37

0.00

39.60 9.16

7.86 4.97 8.88 2.31 13.17 0.00 0.00 42.86 14.19 2.89 0.00

0.00

1.43 0.00

12.50

10.00

9.05 14.13 0.00 0.00

88.50 0.00 3.07

P.E Ratio

as at Friday, September 28, 2012

Vanguard, MONDAY, OCTOBER 1, 2012 â&#x20AC;&#x201D; 35

C M Y K

36 — Vanguard, MONDAY, OCTOBER 1, 2012

Homes & Housing Finance BRIEFS Firm to unveil real estate financing options firm has concluded plans to hold a two-day seminar to explore measures to enhance real estate financing and management in Nigeria, with the theme, “Financing strategies for real estate projects”, slated to hold in Lagos October 16 and 17. In a statement, Clabema Investment International Limited said the move is to bring stakeholders together to explore financing options for housing development. “This move is coming at a time when experts continue to express worry over government’s inability to provide housing for the people over the years, even as stakeholders and industry operators advocate social housing to stem the impending housing crisis in the country. Financing in real estate is a great way to grow wealth if done responsibly. Developing the knowledge to correctly identify and analyse potential profitable real estate investments is the necessary first step to becoming a successful real estate investor,” it stated.

US home sales on two-year high ALES of previously owned US homes reached their highest level for more than two years in August, figures show. Prices for such homes also rose, according to figures from the National Association of Realtors (NAR). The figures added to the picture of an improving US housing market, although the number of first-time buyers fell back from 34 percent to 31 percent. Earlier, figures from the US Commerce Department showed new house building had also risen between July and August. Seasonally adjusted home sales were running at an annual rate of 4.82 million last month, according to the NAR. That is the biggest number since May 2010, when sales were boosted by a federal home-buying tax credit. However, the figure is still below the 5.5 million units a year level seen as consistent with a healthy housing market. The average price of a resold home rose by 9.5 percent from August 2011 to $187,400, with fewer people forced to sell, the biggest increase since January in the boom year of 2006.

C M Y K

•Middle income housing development

Lagos set to reduce cost of land documentation •Explains delay in GIS take-off Stories by YINKA KOLAWOLE AGOS State government has commenced moves to reduce the cost of land documentation in the state. Surveyor General of Lagos State, Mr Joseph Olorunjuwon Agbenla, who disclosed this recently, also explained that the delay in the take-off of the state’s Geographic Information Systems (GIS) and digital mapping was due to logistic problems. It would be recalled that a report on Doing Business 2012 by the World Bank noted that the average cost of registration as a percentage of property value in Nigeria is 20.8 percent, compared to average of 9.4 percent for sub-Saharan Africa. Specifically, the report stated that property registration costs 0.7 percent of property value in Ghana; 3.0 percent in Sudan; 5.0 percent in Botswana; while in South Africa, registration costs 5.6 percent of property value. Agbenla however said that Governor Babatunde Fashola assured officials of the World Bank during a recent visit to his office, that government will do everything necessary to substantially reduce cost of land acquistion and documentation in the state. “The World Bank during their visit made the observation and the governor has said he would do all in his power to reduce this cost, not only for individual developers of housing projects, but for

every category of people who need land, including investors,” he remarked. On the take-off of GIS in the state, he assured that it would go online before the end of the year, adding that existing pieces of information were being uploaded onto the system. According to him, “the present land documentation system is slowed down by physical submission and retrieval of land information for processing land titles, particularly Certificate of Occupancy (C of O). The base station is ready and would become operational once some issues are resolved. “Very soon, the GIS and

enterprise mapping project will be in the air. The delay was due to some logistic reasons beyond anybody’s control. The project has been completed and the necessary data had been uploaded; we are currently addressing the grey areas. Within a limited number of months, we will be in the air and people will have access to it from anywhere in the world. We have the control room at the Abacus Centre, which is the computer system centre for the Lagos State Government. The website is already completed and we have the officers on ground to administer and manage it. Once the citizens pay, they will be given cards

from Interswitch to access the system.” Agbenla said the aim is to integrate data from the land registry, land information systems and GIS to have a robust land registry. “At the punch of a button we will have the characteristics of all land in Lagos State, the government will not only earn money but the public will have ease in identifying their properties and the issue of multiple C of O will be a thing of the past. The state government has done a lot in that line. The package has been uploaded and everything is set. It is just some gray areas that are being fashioned out now,” he stated.

Nigeria requires N56trn to meet housing needs BOUT N56 trillion is required to adequately meet the housing needs of Nigerians, said to be in deficit of about 16 million housing units. Managing Director of Federal Mortgage Bank of Nigeria (FMBN), Mr. Gimba Ya’u Kumo, said the figure is based on a conservative cost of construction at N3.5million per unit. “Fundamentally, the nation needs 16 million housing units to bridge the housing deficits in the country, and providing these houses will cost N56 trillion at a conservative cost of N3.5million per unit. This is a colossal amount which

cannot be funded only through the NHF, but requires urgent injection of funds from both the government and the private sector. That is why we are as well exploring offshore funding to boost financing for mass housing which the nation urgently needs,” he said. Kumo said the management of FMBN has been pursuing relationships with key institutions like the Nigerian Airforce, Nigerian Navy, Economic and Financial Crimes Commission(EFCC), Nigeria Police, among others, with a view to financing the building of staff residential estates for them through the

NHF scheme. In this regard, he said the bank has offered to finance the building of 150 housing units in each state of the federation and Abuja for men and officers of the Nigeria Police totaling 5, 550 housing units, adding that the police leadership has accepted to support this initiative. He said the apex mortgage bank will continue to work assiduously to provide shelter for Nigeria’s teeming population, despite the constraints it was facing in the enforcement of compliance with the NHF scheme, outdated mortgage legislations and inadequate funding. C M Y K

Vanguard, MONDAY, OCTOBER 1, 2012 — 37

Homes & Housing Finance

Makoko: Slum dwellers need a new life – Lagos lawmaker By EBUN SESSOU GAINST the backdrop of the recent demolition of Makoko, a coastal community in Lagos, by the state government, a lawmaker in the Lagos State House of Assembly has called on government to design programmes that will ensure that people living in slums are given a new life. Mr. Mr. Lanre Ogunyemi, representing Ojo II constituency in the state legislature, in an exclusive interview with Vanguard, said that ongoing discussions in the aftermath of the demolition must accommodate the views of the Makoko evictees and other people living in slums across the state. Ogunyemi, who is also Chairman, House Committee on Energy, Mineral Resources and Waterfront Infrastructure, called on the residents of Makoko to take advantage of the on-going discussions as directed by the Governor, Babatunde Fashola and come up with a solution that would be in their best interest and that would also move Lagos forward. “Lagos is virtually a megacity and because of the present situation, there is always plan to resettle certain settlement that we think are not in conformity with the expectation of the State. But, there must be better resettlement if people must move. I believe, government will not throw thousands of its people into a daylight penury and poverty without making alternative arrangement for them. “All over the world, there is provision for the poor and that is what we call evolution or involvement of new towns. Lagos has what is called new towns development authority and by the United Nations charter, there are bound to be emergence of new towns. With the way Makoko is, there is no development that can take place there. What government is doing there is not total demolition of Makoko. The only contentious issue revolves around those who built their houses under power-line. And therefore, there is need to create a safe way to safeguard the lives and properties of the people living in Makoko. “We must not give chance for any disaster before taking necessary measures. Secondly, the whole of

C M Y K

Makoko is choked and therefore there is need to create avenue for some of the facilities to be in place. What has happened in Maroko might not be the same in Makoko and that is why people should not be quick to rush to judgement.

hat we want there is the beautification of the waterways which is currently our topmost priority. And the point is that an aesthetic look of Makoko must improve in the interest of the image of Lagos as a megacity. We have Ajegunle slum where government is putting efforts to ensure a better atmosphere.

This is not a government that empowers the rich at the detriment of the poor,” he explained. On the allegation that government wants to give the place out to developers, he noted that the government has not made that declaration to the best of his knowledge. “Makoko has been there for so many years and I don’t want to believe that government would be insensitive to the community there. Prior to now, I am told that government has been having series of roundtable talks with the leaders of the community to give a new look to Makoko. But I am of the

opinion that concession must be made on both sides so that Lagos can be what we all want it to be. There is no indication that portends that government wanti to collect from the poor and give to the rich. “If the Lagos State government did not give out any master-plan on Makoko, I think, there is no point talking about it. Usually, when government comes up with a master-plan for the real development of an area, certain considerations are given to the original occupants. But there could also be the resettlement option,” he concluded.

BRIEFS Cross River approves N216m for land compensation ROSS River State government has approved N216.4m as compensation to owners of land acquired for various projects in the state. Commissioner for Lands and Housing, Mr. Raphael Uche, said in Calabar that the compensation would be borne by the government apart from the land acquired by the Cross River State Water Board Limited for waterworks at Ikom and Ogoja. He gave a breakdown of the compensation as: N30.7 million for acquired land at Anyanganse; N19 million for Bebi Airstrip; N52 million for Calabar Riviera Club; N83.1 million for UNICEM evacuation road; and N38.7 million for Theme Park. “The compensation for the right of way to the International Convention Centre has been paid. In respect of the International Airport Road bypass, enumeration for payment of compensation to the expropriated land owners is ongoing. For the Ogoja and Ikom stadia, the acquisitions are still very fresh and the revocation notices have been published,” he said.

US mortgage rate hits record low VERAGE US rates on fixed mortgages have fallen to new record lows, suggesting the Federal Reserve’s stimulus efforts may be having an impact on mortgage rates. Mortgage giants Freddie Mac last week said that the rate on the 30-year loan dropped to 3.40 percent, down from 3.49 percent in the previous week, which was the lowest since long-term mortgages began in the 1950s. The average on the 15-year fixed mortgage, a popular refinancing option, fell to 2.73 percent, down from the record low of 2.77 percent in the previous week. The Fed is spending $40 billion a month to buy mortgage-backed securities. The goal is to lower mortgage rates and help the housing recovery. Fed Chairman Ben Bernanke says the program will continue until there is substantial improvement in the job market. “Fixed mortgage rates continued to decline this week, largely due to the Federal Reserve’s purchases of mortgage securities, and should support an already improving housing market,” said Frank Nothaft, vice president and chief economist, Freddie Mac.

A •Public housing estate

Lagos targets N12bn from Land Use Charge By YINKA KOLAWOLE AGOS State government has unveiled plans aimed at achieving its targeted revenue of N12 billion to be generated from property levies under the State’s Land Use Charge law. The law was established by the State to harmonise existing land charges such as tenement rate, development charges, ground rates and neighbourhood improvement charges. Managing Director, Lagos State Office of Land Use Charge, Mr. Dele Ibrahim, during a recent awareness and sensitisation roadshow, said that the agency has embarked on the campaign to create awareness of the benefits derivable from complying with the law. He noted that a marked improvement in compliance

with the law has been recorded of recent, while still charging officials to do more to further boost the compliance level. He further noted complaints of the challenges of inadequate access in some banks due to poor network. “We have a huge mandate to achieve the N12 billion target but I still believe this market can generate over N25 billion. The compliance level is presently at 27 per cent and is rising. We have to work harder to improve on the revenue collected so as to support infrastructure growth,” he asserted. Ibrahim said the law made provision for the consolidation of all property and land based rates and charges payable under the land rates law, the neigbourhood improvement charge law and tenement

rates law in Lagos into a new land based charge called property land use charge. He said it also includes the assessment of chargeable properties and identification to ascertain those that qualify for exemption or tax. According to him, charges for Owner-Occupied residential property is 0.0394 per cent per annum of the assessed property value; industrial premises of manufacturing concerns, 0.132 per cent; residential property/commercial, 0.394 per cent; while commercial property used by occupier for business purposes attracts 0.394 per cent. Ibrahim charged officers of the agency to maintain the core values of the agency, which according to him, are integrity, efficiency, professionalism and discipline.

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38 — Vanguard, MONDAY, OCTOBER 1, 2012

Flood and famine now: The “fire” next — 1 streets and to steal bread.” (VANGUARD BOOK OF QUOTATIONS P 120). Asking hundreds of thousands of people to leave their jobs and homes without provisions tantamount to asking them to go and live under bridges, beg in the streets and steal bread – all of them illegal in Lagos State. But, that was what Lagos State, the most advanced state in Nigeria, decreed for Makoko people. And Lagos is

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“Thou (meaning Nigerians) are wedded to calamity”. Shakespeare, 1564-1616. “Flooding is yet to be over. A type of flood, called black flood, which is caused by the arrival of flood waters from upstream of the River Niger is likely to hit communities close to the river banks between October and early November.” Minister of Water Resources, Sarah Ochekpe. Last week, the point was made that this series will combine two human interest matters, bed and bread, or their synonyms, shelter and food, which have suddenly become national disasters in Nigeria. Floods are washing away farms and food nationwide; they are also rendering people homeless. All the governments of Nigeria must attend to these emergencies. The Minister ended her address by pointing out that the victims should be blamed for the lives lost because they were warned to evacuate the area. This is a weak argument. Granted, governments called on people to evacuate floodprone areas, but, most people don’t know what constitutes a “flood-prone” area. Until their homes are specifically marked, they hang on to the vain hope that the disaster will happen to others. Secondly, the Minster failed to tell us if governments provided alternative accommodation for the millions under threat before asking them to leave. As Anatole France, 1844-1924, had reminded us, “The law in its majestic equality forbids the rich, as well as the poor to sleep under bridges, to beg on the

consequences for food production as many farms have been submerged.” Under water in those submerged farms is the food Nigerians expect to eat late this year and early next year – if not longer. For a nation which has neglected its abundant supply of rich agricultural land and failed to mobilize its vast human resources in pursuit of food security and self-sufficiency, the days of reckoning are here.

The Minister ended her address by pointing out that the victims should be blamed for the lives lost because they were warned to evacuate the area; this is a weak argument. Granted, governments called on people to evacuate flood-prone areas, but, most people don’t know what constitutes a “flood-prone” area.

not alone. Virtually all the states involved and the Federal Government have consigned millions of Nigerians to sleeping under bridges, begging on streets and stealing, not only bread, but whatever is “stealable”. Just in case anybody has failed to grasp the full picture of the disaster confronting us, with respect to food production, the Minister added that the flooding “ will have grave

fore time. Some other nations, experiencing dry spells have already shown us what the dry season will bring in its wake – heat waves at temperatures never before seen for as long as we can remember. So after the “gods” might have decreed “no more water ”, it will be the fire next time. Parts of the United States and currently Spain, have been hit by forest fires consuming what floods did not carry away. A massive national response is needed from the federal to the states and local governments – if calamity is to be reduced; there is no escaping it; because it is inevitable. However, governments can mitigate the impacts of flood and fire or exacerbate them depending on the measures they introduce or what they fail to do. The question now is: how?

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Anyone is illusioned who does not expect the worst and take precautions right from now on. We might literally have to start drinking the crude oil which had diverted our attention from our real and lasting interests. All this is coming at a time when the global food exporters are also suffering from floods. Unfortunately, it would be foolish to hope for the dry season to arrive be-

Why your building may collapse – 2

here is currently a mad rush to build or own properties at the water- logged Lekki development axis of Lagos State. It is hoped that developers are adequately tackling the foundation problems that the soil conditions of the area may pose.” Ezenwa Chizea, Ph.D, in WHY BUILDINGS COLLAPSE, p60.

Dr. Ezenwa’s book reached me at the right time for this series because it deals with an aspect of life with which I am not familiar. That is being polite to myself, I am totally ignorant when it comes to matters affecting building construction; so are 99.99999% of my Fellow Nigerians. If we were not, virtually all the buildings that had so far been w a s h e d a w a y, w i t h o r without their inhabitants, should not have been there in the first instance. Or, if situated there, the foundations and other materials used should have been differently assorted. The portion of the book dealing with foundations is most illustrative of the errors of judgment made by professionals as well as the quacks, who, Ezenwa politely called “Practical men.” As far as this column is concerned, a contractor is either a professional or he is not. There are no such animals called professional men – only dupes. Unfortunately, too many of us call on them – because that is what we can afford. And governments allow buildings to go up, constructed by these people on sites which should have been avoided and wait to call on people to evacuate on account of flood. L a t e r, t h i s s e r i e s w i l l touch upon every aspect of buildings as presented in the book – together with comments from me.

BUSINESS & ECONOMY Port operation: Customs agents seek establishment of commercial regulator BY GODFREY BIVBERE

ederal Government has been called upon to fast track the establishment of a commercial regulator for port operations following the conclusion of the concession exercise. The establishment of a commercial regulator for port operations will help to stop private terminal operators from exploiting importers and their agents. National Secretary of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), Mr. Uchu Block, in an interview with Vanguard, said, whatever one does is emulated by others. Block told Vanguard that private terminals have been ripping off importers and C M Y K

their agents through storage fees. He said despite the complaints from ports users, government seem not to border about the situation. He disclosed that his principal recently shipped in 15 containers of rice which arrived the country on the 3rd of September, 2012 and duty payment was made on the 7th of the same month. The NCMDLCA scribe said that payment for anticipated storage duration was made for 7th through 21st September (15 days), adding that an officer from his office went to the terminal before 1lam to book for examination on the 10th but was told they had closed for the day. He further pointed out that on the 11th, the same officer went back there before 8am and was again told that they have closed for the day. Out

of annoyance, Block said he went there himself and an Assistant Commercial Manager, told him that they only book 200 containers daily and anything above that figure will be handled the next day. He siad that he demanded to see the most senior officer at their Point Road office but was directed instead to see the Finance Manager inside the port where he was kept waiting for over five hours unattended to. Block who said although the containers were finally booked on the 12 th , deductions were made daily from the anticipatory storage charges that they were forcefully made to pay earlier. Block said at N750 per day multiplied by 15 days, gives a total of Nl1, 250. He noted that should this amount be again multiplied by 15 containers, gives a total of

N168, 750. He explained that should the eight days be taken away from the 15 days, despite payment for days the containers stayed at the port from Saturday to Tuesday which is no fault of theirs; the same calculation of the seven remaining days would come to N78, 750. The NCMDLCA scribe said it will take him and his client about two months to collect N78, 750. Continuing, he explained that the terminal operators know that agents would always push for the return of the excess cash and there insist that the excess funds must be paid directly to the importer, even when payment is made on behalf of importers by their agents. Meanwhile, an official of one of the terminals who spoke with Vanguard, said

the 200 containers policy was as a result of lack of space, adding that they are working at expanding the existing space. On why they are not transferring containers to off dock terminals to create the needed space, the APM terminal official told Vanguard that it is not their duty but that of the shipping companies to transfer containers. Speaking to Vanguard on the issue, Bolaji Akinola, Media Consultant to APM Terminals, said the company will not allow agents to continue blackmailing terminal operators. He said government is talking of 48 hours cargo clearance time and that the three days given by the terminal operator is enough for any serious importer or his agent to clear his consignment out of the port.

Vanguard, MONDAY, OCTOBER 1, 2012— 39

Insurance BRIEFS

‘Cornerstone, Linkage merger will enhance service delivery’ operate as a niche player with minimum capital, if you want to be broad -based and essentially play in the corporate, oil and gas as well as the multinational sectors and also to make the investment necessary to roll out a broad based strategy, I would think you need more than N5 billion. Relationship between capital and current market volume?

By ROSEMARY ONUOHA

ORNERSTONE Insurance Plc and Linkage Assurance Plc have notified the Securities and Exchange Commission (SEC) of their intention to merge into one corporate entity. In this interview, Group Managing Director of Cornerstone, Mr. Ganiyu Musa, disclosed that the merger is in the interest of all stakeholders.

ne of the consequence of the fragmentation is the fact that very few individual insurance companies have the necessary financial capacity to invest in human capital, technology and infrastructure to be able to really provide the type of service that will appeal to and attract the 90 million or so adults out of the 160 million population. On the other hand, your capacity to underwrite and retain risk is also dependent on the level of capital that you have. When you are small and fragmented, there is only very little that you can write and retain. We therefore concluded that, to really play a key role, we needed to have a minimum size to be relevant. Individual companies have different areas of strength. In choosing Linkage, we took a lot of things C M Y K

•Mr. Ganiyu Musa into consideration. We looked at the strength and the relative position of Cornerstone as well as the strength of Linkage. We believe linkage gives us complimentary advantage in a number of areas. One thing we hold very dearly here at Cornerstone is our commitment to operating at a very high level of professional standard and ethics. It was a key requirement and a defining factor in reaching the first stage of considering a merger partner and interestingly in this area we share a lot in common with Linkage. And we have looked at the records of the two businesses and concluded that coming together is in the interest of all stakeholders including our staff, the shareholders and more importantly the insuring public.

e believe the combination will give us the opportunity to come up with the appropriate products, engage the right skills and invest in the right technology that will enable us to deliver our services seamlessly to many people. The necessary applications have been made to the Securities and Exchange Commission (SEC) and as soon as we receive the necessary approval from SEC, we will now go to our shareholders to request for their approval. What will be the financial Strength of the combined entity? At the moment, we are at about N6 billion capital at Cornerstone and N3 billion at Linkage, but by the time we account for the fair value adjustment resulting from the

first time adoption of the International Financial Reporting Standard (IFRS) the combined entity is expected to have a shareholders fund of up to N12 billion, which is way beyond the N5 billion minimum capitalisation for composite companies. What is your Position on capital base for insurers? It is difficult to make a

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Why are you merging with Linkage Assurance? I mentioned that the African Capital Alliance consortium had worked with the management of Cornerstone to put in place a robust strategy to reposition the company to play a very key role in the emerging insurance industry landscape in Nigeria. One conclusion that was reached at the strategy session is the fact that the insurance industry today in its current structure is still very fragmented. Even though we have had significant progress with the successful recapitalisation that was midwifed by NAICOM in 2007, you still discover that the 49 insurance companies put together write roughly N200 billion of premium in a country of 160 million people that is really very poor. The penetration ratio is very low, it is less than one per cent. Of the 49 companies, you probably have less than half writing premium income equal to or higher than their share capital which is usually a measure of the efficiency of capital utilisation by insurance companies.

ooking at the technical solvency at the moment, you are likely to conclude that there is gross under-utilisation of capital if you compare theN200 billion annual industry premiums to the total industry shareholders’ fund of about N347 billion. One of the objectives of the Market Development and Restructuring Initiative (MDRI) being midwife by NAICOM is to attain one trillion naira industry premium income in the short to medium term. I don’t believe it is an unrealistic target if you look at the current level of insurance penetration. So, the question is, why have we not been able to move from the N200 billion to N1 trillion or more. There are only few individual companies on a standalone basis with the

The combination will give us the opportunity to come up with the appropriate products, engage the right skills and invest in the right technology that will enable us to deliver our services seamlessly to many people”

definitive pronouncement. It is not unusual to have niche players. The regulatory requirement is N5 billion, but the truth is that if you have N5 billion there is only so much that you can do because you have to look at what you need to invest in infrastructure, technology, people, etc. If in a number of these things you have to make the investment up front before the income flow will come in, you probably require to have more than N5 billion. Secondly, if you are going to play in some segments of the market, corporate, oil and gas, multinational sector, if you have a capital of N5 billion and you want to insure a major industrial risk for instance, they are not going to take you serious. At N5 billion, you have to make heavy use of Reinsurance which will reduce your retained income and the rest. So while it is possible to

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financial muscle to invest in developing those areas of the business that will move us from the N200 billion as an industry to the trillion Naira mark. We all run after the same NNPC business; head of service account and such major accounts. So the investment in infrastructure, technology that is needed to build a sustainable business model is not focused on because we don’t have the money to do that. So, there is the potential for business volume far beyond the level of capital that we have. New strategic focus Pursuing the strategy that we have set for ourselves in Cornerstone is not a sprint, it is a marathon and we need a lot of upfront investment and especially if we take it together with what I will call the radical departure that we set out to introduce into the way we do business.

Stanbic IBTC Pensions showcases accessibility in new campaign TANBIC IBTC Pension Managers has renewed its appeal to Nigerians to recognise the country’s new pension scheme as a powerful tool with which to set future goals and create the comfort and security necessary to enjoy fulfillment in retirement. Unveiling the second phase of its nationwide awareness campaign in Lagos, the company reiterated its reputation as a trusted and accessible safe haven for investment and as an institution that delivers exceptional service to its clients. Chief Executive Officer, Dr. Demola Sogunle, said the company will continuously help to enhance industry best practices, part of which include creating awareness about the benefits of retirement savings and helping both employers and employees plan for that eventuality. Sogunle emphasised that the enactment of the Pension Reform Act of 2004 has unleashed healthy competition in the industry, resulting in more transparency and accountability, which in turn has enhanced efficiency, innovation and value for money.

NAICOM facilitates settlement of controversial claims HE National Insurance Commission, NAICOM, through its Complaints Bureau, has facilitated the settlement of claims by insurance companies to the tune of N1,220,645,790.09 in the first half of this year. In a statement last week, NAICOM said that the claims payment involved a total number of 52 cases concluded by the Bureau during the period. In the period under review, the Complaints Bureau dealt with a total number of 349 cases and held four adjudication meetings. Out of this figure, 86 of them were fresh complaints while the remaining (263) are existing/ongoing cases. The outstanding claims are currently receiving the attention of the Commission, with a view of achieving a quick resolution to the satisfaction of all stakeholders, particularly, members of the insuring public.

40 — Vanguard, MONDAY, OCTOBER 1, 2012

Insurance BRIEFS NAICOM intensifies fight against non claims payment By RITA OBODOECHINA

he National Insurance Commission, NAICOM, said it has strengthened its Complaints Bureau units to deal with complaints from the insuring public on issues relating to non-payment of genuine claims by insurance companies and other areas of dispute. Commissioner for Insurance, Mr. Fola Daniel, who stated this at the 2012 seminar of the Financial Services Group of the Lagos Chamber of Commerce and Industry, LCCI, last week, said that the new insurance bill provides for an enhanced assets classification and appropriate dispute resolution mechanism. Daniel who spoke on the theme ‘Repositioning the Nigerian insurance industry to enhance relevance to National economic transformation’ explained that insurance is the most favoured risk transfer mechanism and many diverse claims such as the victims of severe floods, motor accident, fire accident, to claims emerging from explosions, air crashes, have all tested the resilience of the insurance industry. He said, “Similarly the reinsurance industry has come to the fore in the light of its crucial role in supporting catastrophe risk and in maintaining financial stability.” The NAICOM boss added that there is a similar link between development of insurance and economic development. The commonly used index of measuring the development of insurance in an economy is the market penetration which is the ratio of total insurance premiums to the Gross Domestic Product, GDP, and this is less than one per cent in Nigeria.” He stressed that in development economies, insurance companies are a major source of the long-term capital and have dominant share in total assets. He said, “They also provide funding for end-ofservice indemnity, life insurance benefits, annuity and gratuity.” CContinuing he said, they M Y K

AIO at 40: What hope for African insurers? Pix 1 caption Ganiyu Musa, Managing Director Cornerstone Insurance Plc QUOTE The combination will give us the opportunity to come up with the appropriate products, engage the right skills and invest in the right technology that will enable us to deliver our services seamlessly to many people.”

‘Cornerstone, Linkage merger will enhance service delivery’ Cornerstone Insurance Plc and Linkage Assurance Plc have notified the Securities and Exchange Commission (SEC) of their intention to merge into one corporate entity. In this interview, Group Managing Director of Cornerstone, Mr. Ganiyu Musa, disclosed that the merger is in the interest of all stakeholders. By ROSEMARY ONUOHA Why are you merging with Linkage Assurance? I mentioned that the African Capital Alliance consortium had worked with the management of Cornerstone to put in place a robust strategy to reposition the company to play a very key role in the emerging insurance industry landscape in Nigeria. One conclusion that was reached at the strategy session is the fact that the insurance industry today in its current structure is still very fragmented. Even though we have had significant progress with the successful recapitalisation that was midwifed by NAICOM in 2007, you still discover that the 49 insurance companies put together write roughly N200 billion of premium in a country of 160 million people that is really very poor. The penetration ratio is very low, it is less than one per cent. Of the 49 companies, you probably have less than half writing premium income equal to or higher than their share capital which is usually a measure of the efficiency of capital utilisation by insurance companies. One of the consequence of the fragmentation is the fact that very few individual insurance companies have the necessary financial capacity to invest in human capital, technology and infrastructure to be able to really provide the type of service that will appeal to and attract the 90

million or so adults out of the 160 million population. On the other hand, your capacity to underwrite and retain risk is also dependent on the level of capital that you have. When you are small and fragmented, there is only very little that you can write and retain. We therefore concluded that, to really play a key role, we needed to have a minimum size to be relevant. Individual companies have different areas of strength. In choosing Linkage, we took a lot of things into consideration. We looked at the strength and the relative position of Cornerstone as well as the strength of Linkage. We believe linkage gives us complimentary advantage in a number of areas. One thing we hold very dearly here at Cornerstone is our commitment to operating at a very high level of professional standard and ethics. It was a key requirement and a defining factor in reaching the first stage of considering a merger partner and interestingly in this area we share a lot in common with Linkage. And we have looked at the records of the two businesses and concluded that coming together is in the interest of all stakeholders including our staff, the

’

Despite the fact that insured losses from the major disasters that have occurred in recent times including the J a p a n e s e earthquakes and tsunami, and tornadoes in various parts of the world adversely affected the performance of foreign i n s u r a n c e companies, the African insurance market has continued to be active

shareholders and more importantly the insuring public. We believe the combination will give us the opportunity to come up with the appropriate products, engage the right skills and invest in the right technology that will enable us to deliver our services seamlessly to many people. The necessary applications have been made to the Securities and Exchange Commission (SEC)

•Prisca Soares, Secretary-General of the AIO and as soon as we receive the necessary approval from SEC, we will now go to our shareholders to request for their approval. What will be the financial Strength of the combined entity? At the moment, we are at about N6 billion capital at Cornerstone and N3 billion at Linkage, but by the time we account for the fair value adjustment resulting from the first time adoption of the International Financial Reporting Standard (IFRS) the combined entity is expected to have a shareholders fund of up to N12 billion, which is way beyond the N5 billion minimum capitalisation for composite companies. What is your Position on capital base for insurers? It is difficult to make a definitive pronouncement. It is not unusual to have niche players. The regulatory requirement is N5 billion, but the truth is that if you have N5 billion there is only so much that you can do because you have to look at what you need to invest in infrastructure, technology, people, etc. If in a number of these things you have to make the investment up front before the income flow will come in, you probably require to have more than N5 billion. Secondly, if you are going to play in some segments of the market, corporate, oil and gas, multinational sector, if you have a capital of N5 billion and you want to insure a major industrial risk for instance, they are not going to take you serious. At N5 billion, you have to make heavy use of Reinsurance which

will reduce your retained income and the rest. So while it is possible to operate as a niche player with minimum capital, if you want to be broad -based and essentially play in the corporate, oil and gas as well as the multinational sectors and also to make the investment necessary to roll out a broad based strategy, I would think you need more than N5 billion. Relationship between capital and current market volume Looking at the technical solvency at the moment, you are likely to conclude that there is gross under-utilisation of capital if you compare theN200 billion annual industry premiums to the total industry shareholders’ fund of about N347 billion. One of the objectives of the Market Development and Restructuring Initiative (MDRI) being midwife by NAICOM is to attain one trillion naira industry premium income in the short to medium term. I don’t believe it is an unrealistic target if you look at the current level of insurance penetration. So, the question is, why have we not been able to move from the N200 billion to N1 trillion or more. There are only few individual companies on a standalone basis with the financial muscle to invest in developing those areas of the business that will move us from the N200 billion as an industry to the trillion Naira mark. We all run after the same NNPC business; head of service account and such major accounts. So the investment in infrastructure, technology that is needed to build a sustainable business model is not focused on because we don’t have the C M Y K

Vanguard, MONDAY, OCTOBER 1, 2012 — 41 By PROVIDENCE OBUH

L-R: Mr. Olajide Zaccheus, MD/CEO King Solomon Microfinance Bank, Mrs. Dayo Simpson, Director, Lagos State Ministry of women Affairs and poverty alleviation, Mrs. Angela Adegboyega, Chairman Board of Directors KSMfB and Mrs Kemi Adeniran Director KSMfB during the bank’s grassroots business skills workshop for micro entrepreneurs in Lagos.

Microfinance Bank tasks FG, CBN on credit scheme …as KSMfB train micro entrepreneurs By PROVIDENCE OBUH

he Federal Government and the Central Bank of Nigeria (CBN) has been called upon to step up effort towards the launch of the Small and Medium Enterprises Credit Guarantee Scheme (SMECGS), to promote access to credit by SMEs in the country. Meanwhile, in realization of the huge knowledge deficiencies among micro business operators, King Solomon Microfinance Bank (KSMfB) embarked on a five weeks training programme to improve their business ideas. “If this fund is launched by the CBN, it will remove all of the areas in which the MFBs are being beclouded, we want the government and regulatory agencies to help us put up a fund to train, not only to train the bankers but to train the entrepreneurs, to help them improve their businesses, Mrs Angela Adegboyega Chairman KSMfB has said. “In our micro credit experience of lending to our clients who are mainly traders, street vendors, market women, artisans and so 00, we have realized the need to address some of the knowledge deficiencies and gaps which we have identified in these type of businesses and to provide tailor made training to address these knowledge gaps, Adegboyega stated, saying that SMEs have been recognized Internationally as the engine for development

and poverty alleviation in any economy. Speaking at the grass roots business skills workshop for micro entrepreneurs organized by bank in collaboration with Freedom Foundation, a Non Governmental Organsiation, she stressed that MFBs are critical to any economy seeking growth, hence there are so many people the conventional bank will not give money to, especially

entrepreneurs. “The roles of MFBs are important because they are dealing with more than 70 percent of the population of the country. “We in the bank, have seen the need to improve the businesses of very small enterprises and to support the start up of others not only through financial empowerment but also by training entrepreneurs on what makes business successful and sustainable.

Micro-Finance

“By organizing this workshop free for all participants, the bank is joining hands with the Government to improve the social and economic well being of the micro entrepreneurs.” Corporate Social Responsibility The workshop organized is in fulfillment of our social responsibility and the role our bank is expected to play, Adegboyega added. She called on other Microfinance banks to provide similar training for micro businesses and entrepreneurs in the informal sector in their constituencies who have also not been exposed to such trainings. Managing Director Mr. reveal that as at August 31st 2012, the bank has given out about N113, 000,000 to about 520 customers with 70 per cent women leading the trail, while its capital base moved up to N90, 000, 000 as a unit MfB from N20, 000, 000 at which the bank started operations. , Mrs. Dayo Simpson of the, Ministry of Women Affairs and Poverty Alleviation commended the initiative, encouraging others to join. However, it would be recalled that the FGN through the CBN launched the microfinance banking policy in December, 2005 to grant microfinance banking licenses to institutions to enable them provide banking services to the unbanked and those that were not attended to by the conventional banks.

C-River completes 227 micro projects in 14 LGAs By Johnbosco Agbakwuru

ROSS River State Government has completed about 227 out of 319 approved micro projects valued over N900 million in fourteen Local Government Areas. The projects which were parts of the Governor Liyel Imoke led administration’s efforts towards imparting positively on the lives of the rural dwellers of the state and completed as at August 2012, were in the areas of education, environment and health which were given more priority and water, transport and socioeconomic micro initiatives. Speaking at a quarterly review meeting with Community projects management committee in

Calabar, the General Manager of the State Community and Social development Agency, Pastor Victor Ovat said that such platform became necessary to improve on the current profile in completion of micro projects amongst hinterlands and communities of the state that is now very competitive on a national scale. Ovat said that the agency intervention initiatives, have taken steps to enhance optimal performance in projects completion through regular exchange of experiences designed to overcome teething challenges in the field, and that the periodic review sessions will enable the agency mainstream the status of rural projects to achieve best practices and effective service delivery efforts at the third tier level.

He disclosed that about 227 out of 319 approved micro projects valued over N900 million had so far been completed in fourteen local government areas across the state as at August 2012, adding that education, environment and health were the more priority sectors followed by water, transport and socioeconomic micro initiatives. The meeting resolved that while issues of laxity, absenteeism and incompetence on the part of benefiting communities would be punished, effective supervision will be guaranteed by ensuring that all existing projects were duly completed and commissioned before the initiation of new ones in a bid to achieve timely completion and adherence to specifications.

BRIEF India, Nigeria emerges winner, International youth entrepreneur contest

oonam Kumai an indigene of India has emerged as the grand prize winner in the inaugural Indiafrica business venture competition organised by the Ideaworks and the Public Diplomacy Division, Ministry of External Affairs, Government of India. While Kola Bayole, a 20 years old Nigerian, who represented a team from South Africa, emerged as one of the enterprising young winners. Nine finalists from five countries presented their business proposals to experts from Africa and India, competing for a $10,000 grant Kumari who emerged after presenting her idea of a solar powered harvester, contested with nine teams from Nigeria, Kenya, Uganda, South Africa, amongst other Indians before a 9-member Grand Jury. The other winners include, Zubaida Bai from India with her novel health-care venture, Kennedy Kithake and Bhiraw Kumar Mandal of India for his innovative hydrogen based energy solution. The jury panel comprised of leading business experts from Africa and India: Jahman Anikulapo, Editor Sunday Guardian, Ini Onuk CEO Thistlepraxis Consulting Lagos and Member World Economic Forum’s Global Agenda Council on Africa, Niyi Yusuf, Country Managing Director Accenture Nigeria, Enase Okonedo, Dean Lagos Business School, Ozim Ifeoma Obasi, Senior Counsel and Compliance Leader Sub-Saharan Africa GE Oil & Gas, Vivian Ani Advisor Enterprise Development Centre, PanAfrican University, Anoop Ratnaker Rao, COO Naandi Foundation India, Karthik Chandrasekha CEO Accelerator India, among others.

Global Islamic Microfinance Forum to be held in UAE

he Global Islamic Microfinance Forum on Islamic Microfinance will be held in the UAE on 8th December, 2012. Delegates of more than 30 countries will attend this forum and share their expertise. C M Y K

42 — Vanguard, MONDAY, OCTOBER 1, 2012

Economy

ecently, the nation’s aviation industry was thrown into confusion, following selfgrounding of operations by Arik Air, informed by the picketing of the airline by unions in the industry over debts owed agencies, including the Federal Airports Authority of Nigeria (FAAN) and Nigerian Airspace Management Agency (NAMA), amongst others. The question is why should aviation ground to a halt simply because an airline refused to fly? The answer is simple: Arik Air has the largest fleet size in the country today, with over 30 aircraft of various sizes and range and operates no less than 126 flights within the country. No other airline offers anything close to this. The situation was not helped by the disappearance of Dana Air, following its recent crash, and complementary efforts of Aero and IRS, the only other surviving airlines, were just not enough to meet with the volume of passenger traffic during the period. The issue of airlines’ debts to aviation parastatals had been a thorny one which nobody had been able to address until things came to an head penultimate week. Agencies such as FAAN, which owns and maintains airports across the country; NAMA, which provides all navigational facilities for safe flights, have often raised alarms over the crippling effects airlines’ debts posed to their capacities to provide and maintain requisite facilities at the nation’s airports. Not even the regulatory agency, the Nigerian Civil Aviation Authority, NCAA, is spared of this, as the five per cent passengers service charge (PSC) airlines collect on behalf of the agency is often not remitted. On the last count, FAAN alone laid claims to over N7.1 billion debt owed it by domestic airlines operating in the country. It does appear that only domestic carriers are involved in this debt trap, since none of the service-providing agency is yet to raise a similar outcry against foreign airlines over refusal to pay for services rendered to them. Unlike Nigeria Airways, the nation’s liquidated national carrier, which was set up by the federal government largely to provide social service for purposes of national prestige, all domestic airlines currently flying in the country are privately-owned and are, therefore, profitC M Y K

Paying the price of Nigeria Airways liquidation

•Stella Oduah, Minister of Aviation driven. In other words, the airlines were established by their owners to make profit. It does become very strange why airlines which are not offering free services to Nigerians would refuse to pay for services rendered to them by aviation agencies. It should be noted that in other climes, airlines offer, for example, complementary tickets to media practitioners, especially those in the aviation sector, to enable them move around to cover the industry effectively and efficiently. Same practice had been extended to Nigeria by airlines operating into the country. But most Nigerian airlines have, as a policy, not to grant free or rebate tickets to anyone, all in the bid to maximise revenue, so why should such airlines want to use facilities provided at airports for free?

t is also important to state that debts have a negative bearing on safety, the hallmark of aviation practice. It is common knowledge that the agencies would only be able to provide facilities for s e a m l e s s flight operations by airlines, if they have the necessary funds to do so. The Nigerian case is even more dire. Virtually all the agencies are at present self-subventing

and getting virtually nothing from the federal government in terms of revenue allocation. Where there are interventions by government, such assistance take time to materialise because of bureaucratic bottlenecks. In the days government made budgetary allocations to aviation agencies, funds were not made available until the third or last quarter of the year. Consequently, things were

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By KENNETH EHIGIATOR

the Sosoliso and ADC plane crashes in Port Harcourt and Abuja respectively could have been averted if both airports had such facilities as AntiWindshear device and Doppler Radar. Preliminary reports of investigations into both accidents revealed that they were caused by Windshear. It is, however, comforting to note that such facilities had been installed in the nation’s international airports. Other airports in the country need same equipment if accident related to weather are to be staved off, but this requires funds, and it is the reason the present situation of debts accumulation by airlines is inimical to safety. he situation has also brought to focus the fact that the regulatory agencies have not done enough of economic audit. Safety audit without corresponding economic audit amounts to nothing. This is because an airline that is not able to meet its obligations to creditors, service providers and staff is an accident waiting to happen. If airlines were being grounded for failure to pay for services, they would be careful not to accumulate debt. It is interesting to note that Nigerian airlines which operate services into other countries pay for services rendered to them in those countries, including ground rent, parking and landing charges, navigational and other charges. Why are they not disposed to paying here? On occasions when Nigerian carriers defaulted in their payments abroad, they were not only grounded by aviation regulators of those countries but also had their aircraft seized. Liquidated Nigeria

But most Nigerian airlines have as a policy not to grant free or rebate tickets to anyone, all in the bid to maximise revenue, so why should such airlines want to use facilities provided at airports for free?

going wrong at airports, that was when much of the rots in the industry set in. Therefore, the agencies need money generated from services provided to airlines to maintain and provide more facilities. Airlines make more money when facilities at airports are up to date. The importance of modern facilities at airports cannot be over-emphasised. Perhaps,

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Airways, Bellview etc, for instance, had had their operations grounded outside the country for failure to pay for services. Government has not also demonstrated sufficient will to do aviation business in the country the way it is done in other climes. Aviation is an international business and has no Nigerian type. Could the grounding of

commercial airline services, which kept passengers stranded at airports across the country have been avoided? The answer simply is yes. If Nigeria had a national carrier, no airline could have held the nation to ransom. At the time Nigeria Airways was liquidated, President Olusegun Obasanjo’s administration had the option of injecting funds into it and privatising it, as advised by the International Finance Corporation, IFC, an agency of the World Bank, but the government chose to do things differently. That led to the death of the airline. Same model was recommended for South African Airways, SAA, which, at the time, had a similar problem with Nigeria Airways. The South African government did the needful and today, SAA has bounced back to life. Local airlines in the country have not shown that they can rise beyond the personal egos of their owners. Besides, most of them are beset by management problems as they are not properly managed. Non of the private airline owner in the country today wants to hear of the phrase merger, which is the direction every airline in the world is heading currently. This is where government’s decision to float a new national carrier comes as a saving grace, if the process would be properly followed through. It is not true that airlines floated by governments don’t do well, after all the best airlines on the continent at present are owned by governments, including Ethiopia Airlines, Kenya Airways, South African Airways, Egypt Air, Air Maroc. Though owned by governments, the airlines are privately-managed, with very strong corporate governance to checkmate corruption, which is, of course, the bane of Nigeria’s development in all sectors. The federal government could do same. More instructive is the case of Emirates Airlines which, though owned by the government of Dubai in United Arab Emirate, had been declaring millions of Dollars annually in profit to its government. The government does not know how the airline is managed but simply waits for its dividends which comes in annually. Therefore, to avert a recurrence of the incident of penultimate week, government needs to fast-track the process of floating a new national carrier and save Nigerian air travellers the trauma of being held by the jugular by a near private monopoly. If Arik can build itself to be a massive carrier it is today in just five years, government can with its resources achieve same in a shorter period.

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Agric

Agric Yes program:

BRIEFS

Over 300 youths empowered in Lagos BY DANIEL ETEGHE

he Lagos State Agriculture Youth Empowerment Scheme, popularly known as “Agric-YES” aimed at empowering youths, has s far empowered over three hundred youths with an additional one hundred participants undergoing training at the moment. Course Officer for Vegetable , Mr. Hakeem Anjolaiya, who disclosed this at the institute training centre at Epe, said that the overall aim of the scheme is to breed a new generation of agroentrepreneurs in poultry, fish farming, bee-keeping and all season vegetable farming. Anjolaiya said the students of the institute normally go through six months intensive training and also a period of internship before they are left on their own as full fledged farmers. He explained that after the training, the government gives the participants money and some plots of land to assist them to go into mechanized agriculture. “Since this programme started in 2009, we have trained about 300 youths and we are in the fourth batch of training 100 of them. We train them in poultry farming, crop farmers, fish farmers meat

production and so on “We get our students through advertisement in the media after that we conduct a test for them, we usually collect 36 female and 64 males for each batch of student to sum up as 100 participants for a session” he said. He further noted that after the training that the participants would be divided into co-operatives and each co-operative would be given the sum of N100million to

carry out their agricultural venture. According to him, “apart from the N100million, the participants were also given accommodation where they can live with their own families. We also have a fully automated layer pen where we generate 500 crates of eggs per day, people are coming to buy them and we move out as much that we can produce. We can’t even meet the demand of the market now” Also speaking during

the chat, the Project Officer, Ram Ranch, Mr. Johnson Oluwashola disclosed that the institute has between 1,000 and 1,500 rams. He explained that the rams were brought into the farm at five months old where they were trained to maturity, stressing that though they were not involved in the breeding process of the rams, that the institute will soon embark on breeding at the ram ranch in the nearest future.

Bosun Jeje, Honourable Commissioner for Housing, Lagos State (2nd Right) receiving a gift from Damilola Awe of AM Facilities (Left) while Ruth Obih, CEO, 3invest Ltd (2nd Left) and Nike Animashaun (Right), Director of Lagos Home Ownership Mortgage Scheme look on, at the Real Estate Unite Exhibition organized by 3invest Ltd in Lagos

Cameroon, IITA to step up efforts to improve the fortunes of farmers By Daniel Eteghe Agric Yes program: Over 300 youths empowered in Lagos The Lagos State Agriculture Youth Empowerment Scheme, popularly known as “Agric-YES”

aimed at empowering youths, has s far empowered over three hundred youths with an additional one hundred participants undergoing training at the moment. Course Officer for Vegetable , Mr. Hakeem Anjolaiya, who disclosed this at the institute training centre at Epe, said that the overall aim of the scheme is to breed a new generation of agro-entrepreneurs in poultry, fish farming, bee-keeping and all season vegetable farming. Anjolaiya said the students of the institute normally go through six months intensive training and also a period of internship before they are left on their own as full fledged farmers.

He explained that after the training, the government gives the participants money and some plots of land to assist them to go into mechanized agriculture. “Since this programme started in 2009, we have trained about 300 youths and we are in the fourth batch of training 100 of them. We train them in poultry farming, crop farmers, fish farmers meat production and so on “We get our students through advertisement in the media after that we conduct a test for them, we usually collect 36 female and 64 males for each batch of student to sum up as 100 participants for a session” he said. He further noted that after the training that the participants would be divided into cooperatives and each cooperative would be given the sum of N100million to carry out their agricultural venture.

According to him, “apart from the N100million, the participants were also given accommodation where they can live with their own families. We also have a fully automated layer pen where we generate 500 crates of eggs per day, people are coming to buy them and we move out as much that we can produce. We can’t even meet the demand of the market now” Also speaking during the chat, the Project Officer, Ram Ranch, Mr. Johnson Oluwashola disclosed that the institute has between 1,000 and 1,500 rams. He explained that the rams were brought into the farm at five months old where they were trained to maturity, stressing that though they were not involved in the breeding process of the rams, that the institute will soon embark on breeding at the ram ranch in the nearest future. Johnson said the success recorded at the farm is part of

the state government’s investment in agriculture as a way of job creation and food security in the state. Rice for job is another lucrative project that has helped to provide job opportunities to most youths as well as increase the volume of rice produced in the state. At the Imota rice processing mill still in Ikorodu, a consultant to the Lagos state government on rice project, Dr. Oluwa Rotimi Fashola pointed out that rice that were processed at the mill were far better that those polished rice that are in the market because of the nutrient inherent in it. He said that the mill has three main buildings where you have the paddy that is raw rice brought from the farm to main building where the rice is processed and to the store room where it is stored before it is dispatched to the market.

FG to set agenda on fisheries at Indonesia

he Federal Government has reiterated its committed to strengthening value chains of fisheries, livestock and crops as parts of strategies to reposition agricultural sector of the economy with a view to making the sector as business rather than a development program. The Permanent Secretary, in the Federal Ministry of Agriculture and Rural Development, Dr Ezekiel Oyeyomi stated this yesterday in Abuja at a meeting to outline Nigeria’s position for the fish and fisheries product slated for Bali, Indonesia. He said the ministry has strengthened its quality assurance unit to support industrial fish trawling and recently embarked on certification for aquaculture industry.” The Permanent Secretary said that the Nigeria’s food safety systems have been receiving substantial international attention of late specially with respect to the establishment of a national food safety committee.

UNDP, Agric Ministry Collaborate On Training for Value Chain

three-day workshop on inclusive markets development with a focus on value chain aimed at building the capacity of civil servants and private sector stakeholders in agriculture ended in Abeokuta, Ogun state during the week. The workshop, the fourth of the five-batch workshops meant to cover the country had the Permanent Secretary, Ministry of Agriculture and Rural Development, Dr. Ezekiel Oyemomi, represented by Dr. Tunji Oredipe, Senior Technical Assistant to the Minister. He said the workshop had “already taken place in Abuja, Ilorin and Calabar, and were, indeed, huge successes,”while the last two batches were organised for Abeokuta and Enugu. “The workshops,” he disclosed, “have been fashioned out by the Federal Ministry of Agriculture and Rural Development in conjunction with the UNDP to facilitate the efficient and effective implementation of the ongoing Agricultural Transformation Agenda.” C M Y K

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Aviation BRIEF FAAN decries poor handling of facilities by passengers at airports By DANIEL ETEGHE ANAGING Director of the Federal Airports Authority of Nigeria, FAAN, Mr. George Uresi has lamented the poor way passengers were handling most of the facilities installed at the various airports for their comfort and s a f e t y . Speaking during the 7th Travel and Business News Safety, Security and Service Summit organised by Travel and Business News at the NCAA annex, Murtala Muhammed International Airport Lagos, the Managing Director, who was represented by the General Manager, Airport Safety Service of FAAN, Mr. Peter Onyeri, pointed out that the way and manner passengers were handling most of the facilities at the airports was very bad. According to him, ‘’one thing that we want to draw the attention of the passengers to is how some of them are handling our facilities at the airport, it is very bad, some of them even go to the extent of purposely damaging those fac i l i t i e s . ’ ’ He said further; ”Some of the equipment have been damaged. The point is that while we are trying to make our people feel comfortable, they are spoiling things for us. For instance, the convenience facilities that we installed at the various airports are being damaged by some passengers. Some of them don’t even know how to use the censor. Most times we find broken parts of our toilet facilities after usage by some passengers. It is bad.”

Power play, intrigues in aviation sector as air travellers groan By LAWANI MIKAIRU HE Nigerian Aviation sector is gradually being killed by power play and intrigues by its regulators and players to the discomfiture of air travellers who are made to bear the pain which is always the fall out of such macabre play. Last week, Arik flight operations were disrupted by aviation workers unions, Arik responded by suspending its operations for three days . Despite,the intervention of the federal government and subsequent resumption of flight operation by Arik, it went ahead last Tuesday to include the Managing Director of Federal Airports Authority of Nigeria, FAAN, Mr George Uriesi on the list of those blacklisted permanently from its flights. Trouble began last week Thursday. Air travellers got to the airport to take their Arik scheduled flights to their various destinations. They were prevented from doing this by aviation workers unions who barricaded Arik terminal at General Aviation Terminal , GAT, and chased away passengers who were about to board their flights. The unions claimed they wanted to recover the debts Arik is owning the three aviation agencies vis: Nigerian Civil Aviation Authority, NCAA, Federal Airports Authority of Nigeria, FAAN, Nigeria Airspace Management Agency, NAMA, and also aviation handling

companies. This action led to the suspension of Arik flight operations for three days with attendant loss of revenue to the airline and inconvenience on the passengers. The unions further said in their statement read by the National President, Air Transport Services Senior Staff Association of Nigeria, ATSSSAN, Comrade Benjamin Okewu that ‘’well the entire unions in the aviation industry, the entire workers under the auspices and the umbrella of

HE Federal Government is likely to float the country ’s long awaited national carrier by December 2012.National President of the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), Comrade Benjamin Okewu disclosed this development to newsmen in his office at the Murtala Muhammed Airport Lagos. According to him, there was a committee set up on national carrier to see that

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debts owned their employers by other parties in legal transactions dully carried out. This is why it was easy for aviation watchers to conclude that the unions were being used. Though the three agencies have addressed a press conference denying pre knowledge of the action of the workers unions, it has been difficult convincing Arik that the agencies were not behind the action of the unions. This much Arik said when they addressed a press conference.

L-R, Head, Corporate Communications, Skyway Aviation Handling Company Ltd. (SAHCOL), Mr. Basil Agboarumi, Head, Public Affairs, Accident Investigation Bureau (AIB), Mr. Tunji Oketunbi and HOD, Public Relation, Nigerian Civil Aviation Authority (NCAA), Mr. Sam Adurogboye at the 7th Safety Services Summit themed “Building Strong Carriers in Africa Through Sustainable Financial Options and A Robust Economic and Safety Strategy” : A case Study of Nigeria held at NCAA Annex, Murtala Muhammed International Airport, Ikeja, Lagos... recently.

Workers sue Air Nigeria for wrongful termination By LAWANI MIKAIRU & DANIEL ETEGHE ORKERS of the grounded Air Nigeria have dragged the Air Nigeria

Development Limited, owner of Air Nigeria airlines, the Chairman of the airline Barrister Jimoh Ibrahim and the Chief Executive Officer of the airline, Mr Kinfe Kanssaye before the National Industrial

FG to float national carrier by December says Okewu By DANIEL ETEGHE

their unions are embarking on revenue drive today and from the statistics available to us Arik air is owing FAAN over N7billion, Arik air is owing NAMA over N5billion, they are also owing NCAA over N5billion ,then there is also the component of dollars for all the three agencies, then we also have the handling agencies like SAHCOL Five Hundred and something million Naira, NAHCO N380 million’’ The question is; since when did workers unions have the responsibility of collecting

Nigeria as a country has its’ own national carrier that would serve as a driver in the aviation industry in the country. Comrade Okewu however noted that the process of creating the national carrier would have been completed before now but for the ill-fated Dana plane crash of June 3rd that slowed the process. He said”I don’t think that the idea of setting up a national carrier for Nigeria is fading away because we are unionist, we like saying it as

it is, there is a committee on national carrier and incidentally the joint admission trade union forum is representing the unions there. By and large, I think that the Dana crash slowed down the activities of the committee and I am aware now that we are trying to hasten up the committee to put finishing touches to their job and then by December 2012 latest, we want to start having flag carriers, national carriers depending on what they want.

Court Holden in Lagos over the illegal and wrongful termination of their employments, non payment of salaries and non remittance of their 7.5 per cent pension scheme contributions. In a suit filed by the workers’ solicitors; Muhmad Adesina ESQ and Ogunsany &Ogunsanya against Air Nigeria and other two defendants, the workers said they were all employed by the Virgin Nigeria Airways Limited via their respective letters of employment but that on December 31, 2010, Virgin Nigeria Airways Limited was change to Air Nigeria Development Limited and all business related and liabilities of Virgin Nigeria Airways Limited were transferred to Air Nigeria. The workers through their solicitors also averred that the

letter notifying them of the change was communicated them by Barrister Jimoh Ibrahim through the Chief Executive Officer of the airline, Mr Kinfe Kanssaye, who also signed the letters. The termination of their employments ,they said did not follow due process as contained in the employment hand book, adding that the workers did not withdraw their respective services to Air Nigeria Development Limited as they did not write any letter to the company. The workers averred that prior to the termination of their appointments by Air Nigeria Development Limited, the airline owed workers arrears of salaries; from May to August, 2012 and that some were paid for the month of May only, while others were not.

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Advertising, Media & Marketing

Quill Awards: Promasidor calls for entries ROMASIDOR Nigeria, makers of Cowbell milk, has called for entries for its recently launched media excellence awards for journalists, tagged ‘Promasidor Quill Awards’. Mr. Andrew Enahoro, Head Legal and Public Relations, Promasidor Nigeria Limited who disclosed this at a press conference in Lagos, said the awards is now officially open as journalists can now enter for the competition through its website. “The ‘Promasidor Quill Awards’ which was launched in March 2012, is now officially open for submission of entries which will run through to March 2013 when it will be closed for compilation. Interested journalists can log on to the website http:// quillawards.promasidorng.com/ to submit their entries.” Further, Enahoro said he awards would cover five categories and will be done strictly on an e-platform. The categories are; Brand Advocate of the year, Best CSR Report of the year, Most Educative Report of the year, Best Report on Nutrition and the Best Photo Story of the year.

Coca-Cola introduces 5Alive’s new look OCA-COLA Nigeria Limited, CCNL, has said that the introduction of mono juice flavours of 5Alive in Nigeria is a move to align with the Global Visual Identity standard of The Coca-Cola Company’s juice brands and offer a holistic new juice experience to consumers. The new 5Alive juice packs unveiled at a launch event recently in Lagos office of CCNL, retains the slim packs of 1litre and 25cl with screw caps for enhanced grip and pour, with more compelling colour scheme and visual images for enhanced shelf appeal. The new 5Alive mono juice offering comes in Apple and Orange favours to complement the existing blends of Citrus Burst, Berry Blast and Pineapple Punch. The new look 5Alive reflects a high level of creativity that will further strengthen preference for the brand. Otome Oyo, Senior Brand Manager, Still Beverages, Coca-Cola Nigeria, said the company’s juice portfolio is being consolidated under the 5Alive master brand which has now absorbed Cappy, another juice brand in its stable.

APCON summit: FRSC push for alcohol Ad ban Stories by Princewill Ekwujuru HEN Tobacco advertisement was banned by Advertising Practitioners Council of Nigeria (APCON), it drew reactions from several quarters, stakeholders in the advertising industry expected same law be applied to alcohol advertisement. Then, the drumbeat was heavy on tobacco advertisement ban, because it was believed in every segment, the public, religious circle and particularly the health sector that it was cancerous, and leads to untimely death, but then little did the public knew that alcohol kills in drove. Today, it appears APCON has re-opened its book to look at the dangers of alcohol and alcohol advertisement, at the recent alcohol summit organised at the instance of APCON in collaboration with the International Centre for Alcohol Policies (ICAP) and BSG, where Osita Chidoka, Corps Marshal and Chief Executive, FRSC, delivered a paper titled; Potential Harm of Irresponsible Alcohol Beverage Marketing: The Road Safety Point of View, where he also pointed out that all aspects of product marketing including advertising, labeling, consumer promotion, packaging and merchandising are integral part of promoting different brands of virtually all consumer goods,while noting that alcohol advertising encourages people to drink. Whilst stressing that tremendous volume of alcohol advertising boosts a sense of belonging, creating a mental picture that makes drinking fun and exciting.

Effects of alcohol advertising: lcohol advertisements can be seen virtually anywhere, especially known for sponsoring sporting events, concerts, etc. Road traffic crashes are one of the main causes of injury and death worldwide, since some of such incidents involve alcoholimpaired drivers. Alcohol consumption impairs certain functions, such as visual acuity and reaction time, increasing the likelihood that accidents may occur. In crashes, 4 percent die every year due to alcohol consumption or its side effects, 9 percent of those who die of

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BRIEFS

From left: MD/CEO, Sweet Sensation confectionery, Mrs. Kehinde Kamson, The Ayangburen of Ikorodu, Dr. S.A.A Oyefusi (Middle) and the Olori Oyefusi during Sweet Sensation courtesy visit to the royal father commemorating the opening of Sweet Sensation outlet in Ikorodu.

Alcohol interrupts the driver’s skills and abilities when it spreads throughout the body system, affecting mainly the brain and the eyes

alcohol are between fifteen and twenty nine years old, whilst 2.5 million people die annually, and many more succumb to illness and injury, as a result of harmful alcohol use He however observed that sufficient warning has not made that those who drink and drive will drive to die. He suggested that effective strategies be put in place which should include targeted interventions, such as education, awareness building, responsible hospitality, and other measures Chidoka explained advertising of alcoholic products does have effect to individual drinking and levels of alcohol-related harm, but that driving requires a variety of skills that can change continually. He warned, a driver must maintain alertness and be able to react quickly to hazards, see clearly, and possess the ability to judge distance and speed. He went on to say drinking patterns can impair a number of the skills necessary for safely driving a motor vehicle and increase crash risk. Impact of alcohol beverage marketing & communication on road users The potential impact of

Driving

alcohol is a factor influencing both the risk of a road crash as well as the severity of the injuries that result from crashes, The Corps Marshall hinted. “Drinking and driving has been for a very long time an offense against the law of our beloved country. In highincome countries, about 20 percent of fatally injured drivers have excess alcohol in their blood, while in some lowand middle-income countries these figures may be up to 69 percent.

he immediate effects of alcohol on the brain are either depressing or stimulating in nature, depending on the quantity consumed Alcohol can lead to a crash since it produces poor judgement, increased reaction time, lower vigilance and decreased visual sharpness Alcohol is believed to affect other aspects of a driver ’s safety such as seat-belt wearing, helmet use, and speed choice Alcohol interrupts the driver ’s skills and abilities when it spreads throughout the body system, affecting mainly the brain and the eyes Alcohol does not affect everyone equally, the intensity varies from one person to another, e.g. age, the body weight, gender, (women are mostly affected), the amount taken either with food or empty stomach, and the health of their liver etc.

Factors that affect alcoholrelated road crashes e noted that teenagers are significantly more likely to be involved in a fatal crash than older drivers A low expectation of getting caught with blood alcohol content above the legal limit has been shown to lead to an increased risk of a crash Drinking and driving is illegal, always dangerous and often deadly Marketing and advertising should never condone operation of machinery, driving or activities requiring heavy concentration before or while consuming beverage alcohol The Effects of Alcohol on

Solutions: Effective drinking and driving programmes have the potential to save thousands of lives, and was identified by the World report on road traffic injury prevention as a proven and effective measure to reduce death and injury on the road safely driving a motor vehicle and increase crash risk. Policies in Place: A new policy is in place which makes it mandatory for commercial drivers license applicants to pass medical and physical examinations (including vision acuity, blood pressure, mental sanity, alcohol level in the blood and hearth related examinations)

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Collegiate presidency and national harmony Our political godfathers in their wisdom have attempted to bring some sanity to the acrimony, insecurity and instability generated by the struggle for the lucrative centre with the concept of rotating the presidency along North and South axis or more loosely, amongst the generally accepted six geopolitical zones. However, the constitutional provision for a maximum of 2 – 4 years terms could mean that each geopolitical zone would produce a president every 48 years (assuming each president controls the treasury for eight years). This also implies that all other eminently gifted, qualified and socially committed presidential materials from all other zones would be wasted in every 48 years cycle with little chance that the best available candidate at any point in time would be the one from the geopolitical region in line for the Presidency! In the above political dilemma, particularly where the plunder of resources takes precedence over service and wealth creation, Nigerians become victims of the greed of a parasitic political class – invariably championed by autocratic leadership in the last four decades. Indeed, the greatest threat to our contrived democracy is dictatorship! If we want sustainable peace and stability in this country, our constitution should ensure that the best available presidential materials from each geopolitical

zone at any one time have unfettered access to contest for and become President. Our constitution should also ensure that no one person controls power long enough to become as formidable as to successfully engineer term elongation and perpetuate a dictatorship! So, how do we tackle these pitfalls? Some eminent Nigerians have rightly argued that the first requirement for a sustainable stable, just and egalitarian nation should be the adoption of a truly federal constitution where the centre devolves more of its powers to the states/regions as

COLLEGIATE PRESIDENCY AND NATIONAL HARMONY

Abuja. These regions will consequently create additional wealth with attendant improvement in social welfare and security. Additionally, we may also consider the adoption of a six-year collegiate presidency to douse the tension and attrition created by the usual battles to install a oneman power centered presidency, and the incessant clamour and grandstanding by each geopolitical group for their turn each time an incumbent’s tenure expires. Under this arrangement, each political party would field a team comprising six candidates

Our constitution should also ensure that no one person controls power long enough to become as formidable as to successfully engineer term elongation and perpetuate a dictatorship!

the engines of growth, so that the states/regions will freely exploit their internal human and material resources and pay appropriate dues to the central government. Such a structure would motivate each region to look inwards and develop its own God-given human/material resources to the best of their ability, rather than wait for monthly handouts from

selected from each of the six geopolitical zones for the post of president for six-year term in office. Each member of the victorious party’s collegiate will serve as president for only one year while the other five members of the collegiate would serve as vice presidents with direct oversight responsibilities for a discrete set of ministries and/or

emoluments and allowances would be constitutionally pegged at par with a level not higher than that of a permanent secretary in the federal and state/regional government respectively.

parastals. The five vice presidents would also be rotated annually from one set of ministries to the other, so that in a six-year term, each member of the collegiate would have served for one year in every segment of federal administration with also one year as president.

The choice is ours to make; do we want to live in apprehension and wallow in inequity, ethnic and political attrition within our body polity or do we truly want to break the chains of our bondage and release our true potential as a great nation?

Such structure will be more costeffective and also make it impossible for one person to consolidate hold on the seat of power or remain long enough to eventually constitute a dictatorship! Furthermore, the abiding intense desire of geopolitical groups to see their own person in the top seat would be realized as each region would perpetually have a member in the collegiate presidency. Nigerians would also be able to enjoy the benefits of the contribution of an eminently qualified ‘PANNigeria’ presidential star team, jointly faithfully pursuing its party’s manifesto in place of the possibility of a manipulative personal agenda.

SAVE THE NAIRA, SAVE NIGERIANS!

At states and local governments levels, the same collegiate system of administration comprising ethnic nationalities can also be put in place to ensure cohesion and harmoniously carry along the majority of the communities in each state. However, very cogent arguments can also be made for the abolition of the enormously wasteful and unviable 36 states structure with its huge operational costs supporting little or no contribution to the wellbeing of citizens, yet providing ample opportunities for more political adventurers to line their pockets; besides, legislators’

BUSINESS & ECONOMY

FG stops CRFFN from collecting transaction fees … Agents protest By GODFREY BIVBERE & EDIRI EJOH

ederal government has stopped the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) from further collection of the recently approved transaction fees, as a result of the petition written to the minister of Transport, Senator Idris Umar by the Association of Nigeria Licensed Customs Agents (ANLCA). Following the suspension, a group of freight forwarders recently gathered in Lagos to protest against the decision of government to stop the collection. The protesting freight forwarders C M Y K

gathered with placards at the CRFFN Headquarters in Lagos. The placards contained inscriptions such as “Customs, leave us alone!”, “National Assembly save the CRFFN Act 16 of 2007”, ``CRFFN needs fund to train our fellow freight forwarders, Pls”, and ``Registered Freight forwarders are fully behind CRFFN”. The National Secretary of the Association of Registered Freight Forwarders of Nigeria (AREFFN), Mr Vincent Okechukwu told newsmen that they were against the position of the Association of Nigerian Licensed

Customs Agent (ANLCA) which condemned the introduction of the transaction fees. “We are here to show solidarity and support for CRFFN as far as the issue of collection of transaction fee is concerned. According to Okechukwu the resolution taken by the freight forwarders is that they are solidly behind the CRFFN and will give the council all the support it requires. Also speaking at the protest, Mr Bodunrin Abolaji, a member of AREFFN, described opposing moves against the transaction fees as “mischievous and parochial”. “Collection of transaction fees at the ports will not

perpetuate corruption; it will not increase cost of doing business at the ports but rather bring it down.

“The fees are just N1, 000 for a 20 feet container and N2, 000 for a 40 feet container,” Abolaji said.

Omoh Gabriel Babajide Komolafe Clara Nwachukwu Peter Egwuatu Yinka Kolawole Favour Nnabugwu Godwin Oritse Godfrey Bivbere Yemi Adeoye Oscarline Onwuemenyi Franklin Alli Michael Eboh Amaka Abayomi Ebele Orakpo Ifeyinwa Obi

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CONTRIBUTORS Princewill Ekwujuru Naomi Uzor Providence Obuh LAYOUT

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